At the 2024 SMM 19th Lead and Zinc Conference and Lead and Zinc Technology Innovation Forum hosted by SMM - the main forum, Fu Peng, chief economist of Northeast Securities, introduced the topic of "Witness Adverse Tide Behind the Change of Commodities".
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Implied volatility is the market's bet on future volatility, while actual volatility is the volatility that actually occurred in the past.
Positions in crude oil with sustained low volatility
The basic logic is still the problem of long supply and short demand, from the perspective of WTI positions, especially speculative shorts and OIS bets to make a comparison as shown in the figure, in fact, in the Q1 quarter, the short bet on oil prices has been reduced, and the bet on the Fed's interest rate cut has also been reduced, and the overall bet on the hard landing of the U.S. economy has been reduced from different perspectives (commodity perspective, derivatives perspective), but expressed the same "soft landing" enhancement.
Super low volatility is worth paying attention to copper
At present, the copper market is facing low overseas inventories and high domestic inventories, and copper concentrate processing fees are falling in record numbers.
Unusual CF TC copper position
1. Traders and producers are inherently short positions in the futures market, mainly to hedge the risk of the spot they hold or the spot they produce;
2. If there is no super contango, because copper itself has a financing function, there is not enough price difference to attract futures to buy spot;
3. All we mainly observe is the short hedging situation of traders and producers, and the actual delivery will cause an increase in inventory;
4. Their opponent is the governing body;
5. If prices fall, short hedging of trade and producers will not increase, and the holdings of asset managers will add fuel to the fire;
6. If the price rises, the short positions in trade and production will increase, while the short positions of asset management institutions will decrease, and the combination of hedging and speculation will form a market counterparty;
7. What is the logic of breaking the position of asset management institutions?
The basic logic is still the problem of long supply and empty demand.
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>> For more details, please watch the live speech video