The US API announced a significant increase of 6.5 million barrels in crude oil stocks, while forecasts expected a decrease of 2.4 million. This larger-than-expected build in inventories highlights a marked rise in supply. In related markets, WTI crude oil prices have fallen closer to $60. Gold remains strong below $3,850 as the US dollar strengthens, affecting overall risk appetite. Ethereum’s price has also dropped to around $3,500 amidst negative market sentiment towards cryptocurrencies. The GBP/USD has seen a sharp decline, falling below the 1.3100 mark. In contrast, the EUR/USD is holding steady near 1.1500, buoyed by cautious expectations from the European Central Bank. DeFi platforms are facing scrutiny following a $120 million hack at Balancer. Additionally, various central banks and the US Supreme Court may pose challenges to currency markets, with potential impacts on the dollar’s performance depending on their forthcoming decisions. This information is forward-looking and comes with inherent risks. The markets and instruments mentioned are for informational purposes only and do not serve as buy or sell recommendations. We cannot guarantee accuracy or timeliness, and all investment activities include potential risks. The substantial 6.5 million barrel increase in crude oil stock for the week of October 31 suggests bearish movements in the energy market. This contrasts sharply with the expected 2.4 million barrel decrease, indicating a potential drop in demand or a supply increase. Historically, builds of this size have preceded sustained price declines, as seen during the economic slowdown in 2023. As WTI crude oil nears the $60 per barrel mark, further declines may be expected. Derivative traders might think about purchasing put options on WTI futures with strike prices below this critical psychological support level. Selling call spreads could also be a profitable strategy if prices drop or stay stable over the next few weeks. The dollar’s strength is putting pressure on other currencies, particularly the British pound. With less than a 30% chance of a Federal Reserve rate cut in December, the GBP/USD has broken below the 1.3100 level. We should consider buying put options to exploit this downward trend. In comparison, the EUR/USD is maintaining stability around 1.1500, caught between a strong dollar and expectations for a cautious European Central Bank. This situation suggests a range-bound market, making options like selling an iron condor on this pair a potentially low-risk and profitable strategy if the currency does not move significantly. Gold is struggling below $3,850, limited by the strong dollar, despite rising fears about a potential U.S. government shutdown. Typically, gold prices and the U.S. Dollar Index (DXY) show an inverse relationship, with a historical correlation of about -0.6 to -0.7. Given this backdrop, a volatility strategy like buying a straddle might help capitalize on significant price movements in either direction. Market sentiment is leaning towards caution due to concerns about global growth and political instability. The CBOE Volatility Index (VIX) has risen by over 10% in the past week amid shutdown worries. Looking back at the long shutdown in late 2018, the VIX spiked dramatically, so purchasing VIX call options now could act as an effective hedge against increased market turbulence.

here to set up a live account on VT Markets now