FxWirePro: Short WTI crude futures or arbitrage

Trade tips: Commodity futures and options

Weekly technicals suggest still a sell indications as there RSI signaling downward convergence with the slumping prices (currently RSI 14 trending at 35.0864), while %D crossover sustains on slow stochastic (currently %D line at 32.9094 & %K line at 10.1667), so overall we don't see any sort of strength in this commodity that can pull back from current levels.

So from current levels keeping speculation mindset we recommend shorting near month futures for target towards $50. Light Sweet Crude Oil (WTI) futures and options are the world's most actively traded energy product. Prefer WTI crude futures for shorting as it plays an important role in managing risk in the energy sector worldwide because the contract has the most liquidity and most transparency.

If puts are overpriced relative to calls, the arbitrager would sell a naked put and offset it by buying a synthetic puts. Similarly, vice versa when you think calls are getting overpriced in relation to puts.

Arbitration can also possible through box spreads where buying debit call spreads and debit put spreads for a risk-free returns.

The opportunity for arbitrage in options market exists once in blue moon for individual investors as price discrepancies often appear only for a few moments.