CME Group expands WTI Crude Oil options

Rick Steves

“Weekly WTI Crude Oil options allow market participants to purchase short-term protection against surprise announcements that can move markets quickly in any direction. With crude oil volatility here to stay, we are seeing market participants turn to these products in record numbers this year.”

CME Group has plans to expand WTI Crude Oil options to include Monday and Wednesday expiries, the world’s leading derivatives marketplace announced.

Pending regulatory review, the new contracts will begin trading on July 31, 2023. Weekly WTI Crude Oil options are listed by and subject to the rules of NYMEX.

With crude oil volatility here to stay…

Volatility in crude oil markets can be significantly impacted by market-moving events such as OPEC announcements, EIA reports, cargo loading schedules and geopolitics.

With expirations now on Monday, Wednesday, and Friday, Weekly options allow for more precise risk management strategies to manage short-term price risk.

Average daily volume (ADV) in Weekly WTI Crude Oil options is approximately 8,900 contracts, up 69% year-over year. Average daily open interest (ADOI) is approximately 20,000 contracts, up 77% year-over-year. ADV in the week leading up to the OPEC+ meeting on June 4 reached 13,700 contracts, its highest ever.

Global oil markets increasingly revolve around WTI as the central price setter

Peter Keavey, Global Head of Energy at CME Group, said: “Weekly WTI Crude Oil options are CME Group’s fastest growing energy products, and we are pleased to provide market participants with flexibility to manage volatility through our expanded Monday and Wednesday expiries.

“Global oil markets increasingly revolve around WTI as the central price setter, and WTI is the only crude oil benchmark with robust, around the clock liquidity in Friday Weekly options, with 15% of on-screen volume occurring during non-U.S. trading hours and 30% of all trades originating from outside of the U.S.

“Oil markets are dynamic and subject to geopolitical and supply events. Weekly WTI Crude Oil options allow market participants to purchase short-term protection against surprise announcements that can move markets quickly in any direction. With crude oil volatility here to stay, we are seeing market participants turn to these products in record numbers this year.”

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