Backwardation

Tyler Durden's picture

VIX ETF Short Squeezes For 6th Day In A Row, Long-Dated Vol Above Monday's Peak





While all eyes are on the front-end of the VIX term structure, today's volatility term structure in the out-dates is now higher than they were at the close on Monday at "peak crisis." VXX - the VIX ETF - is still surging, as the massive short position continues to get squeezed amid the ongoing backwardation in VIX...

 
Tyler Durden's picture

VIX ETF Surges After Serious Short Squeeze For 5th Day In A Row





That's what happens Larry when you have 64.08mm shares short against 59.5mm shares outstanding... and traders read this (and the VIX is stuck in backwardation).

 
Tyler Durden's picture

VIX Backwardation Continues - It's Not Over Yet





While oil prices are surging (global economic meltdown averted), stocks are back in the green on the week (crisis averted), and bonds are collapsing (not because of China selling according to the mainstream because "everything is awesome" again), we point traders' attention to the continued inversion in the VIX term structure. While well off the peak crisis levels, we have a long way to go to "normalized" levels of risk...

 
Tyler Durden's picture

Copper Breaches $5000, Breaks Below 15-Year Trendline





While the PBOC was literally everything in its power to keep the Shanghai Composite above its 200-day moving average as some sign of 'stability', it forgot about that other proxy of overall Chinese economic health: copper. And just as we warned previously, ever since the CCFD crackdown in 2012, copper has been tumbling and more crucially has just broken a 15-year trendline. The plunge in copper means almost one in five mines globally is losing money.

 
Monetary Metals's picture

Why Is Gold Becoming Scarcer, 16 Aug, 2015





Both the October and December gold contracts are backwardated, and Feb '16 contract is not far. The gold market is tight. Why?

 
Monetary Metals's picture

Supply and Demand Report 9 Aug





It began in Dec 2008. To understand it, it is necessary to understand two principles. The first is that gold is money and the dollar is credit (which is currently worth 28.4mg gold). For the second, we emphasize it's not just price, but separate bid and ask prices.

 
Monetary Metals's picture

Supply and Demand Report 26 Jul





For those who are speculating on the dollar—i.e. most people—there was good news. The dollar rose to 28.3mg gold. It’s a big gain, and welcome news for those who keep all of their eggs in the one dollar basket.

 
Tyler Durden's picture

Gold And The Silver Stand-Off: Is The Selling Of Paper Gold And Silver Finally Ending?





In a January 2013 report “Report of the Working Group to Study the Issues Related to Gold Imports and Gold Loans by NBFCs”, the Reserve Bank of India estimated that the ratio of paper gold trading to physical gold trading is 92:1. That is a lot of unbacked paper gold instruments. This has almost entirely separated the “gold price”, such as it is (the clearing price for vast volumes of paper gold “representations” with a fractional backing) from the fundamental supply and demand dynamics for actual physical gold bullion.

As Mr L. famously quipped. "Ever get the feeling you’ve been cheated?"

 
Tyler Durden's picture

Iran Deal Done - "Stunning, Historic Mistake" Or "Profoundly Positive Change"





While slightly later than expected, a comprehensive deal on Iran’s nuclear weapons program has now been reached. As Reuters reports, the agreement will be greeted with alarm in several quarters, both in Washington and Tehran and internationally too, and could yet unravel. Internationally, the deal will accelerate unease in some Arab states, including Saudi Arabia, but it is Israeli Prime Minister Benjamin Netanyahu who remains the fiercest public critic and has issued a warning that the accord will "inevitably lead to a nuclear war." The deal profoundly changes the balance of power in the region, but averts the conflict that was likely otherwise, but as ECStrat notes, Iran offers exceptional investment opportunities, but the near term impact will be to continue oil’s decline back to its lows, potentially taking energy stocks with it.

 
Tyler Durden's picture

Saudi Optimism Trumps Storage Concerns, Sends WTI Crude Surging





A constant stream of hyprocrisy from Fed officials (will print moar money if stuff happens), The EIA (storage is getting fuller and fuller, but production will be lower than expected), and Saudi Oil Minister Naimi's idiocy (increased production, demanding non-OPEC cooperation, but optimistic on prices recovering in the short-term) has sent crude asymmetrically rocketing higher... which is now apparently a good thing for US equities.

 
Tyler Durden's picture

The Saudi Succession: Its Impact On Oil, Markets And Politics





As reported earlier, several hours ago Saudi Arabia announced that its 91-year-old King Abdullah had passed away, in the process setting off what may be a fascinating, and problematic, Saudi succession fight which impacts everything from oil, to markets to geopolitics, especially in the aftermath of the dramatic political coup in neighboring Yemen. As a reminder, it is Saudi Arabia whose insistence on not cutting oil production with the intent of hobbling the US shale industry has led to the splinter of OPEC, and to a Brent price south of $50. Which is why today's event and its implications will be analyzed under a microscope by everyone: from politicians to energy traders. Here, courtesy of Ecstrat's Emad Mostaque, is an initial take at succession, the likely impact on oil, then the Saudi market & currency and finally regional politics.

 
Tyler Durden's picture

Saudi King Abdullah Has Died; Crude Prices Jump





After first falling ill  and being hospitalized in December, Saudi Arabia officials have announced:

*SAUDI ARABIAN KING ABDULLAH DIES, CROWN PRINCE SALMAN SUCCEEDS: STATE TV

As we noted previously when considering this possibility, "a new King can do (almost) anything he wants, including changing oil policy." 79-year-old Crown Prince Salman has been named succesor (and has his own health issues - reportedly suffering from Dementia). Oil prices popped around 80c on the news.

 
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