Oil traders are increasing bets on a blowout in crude oil price spreads as U.S. storage capacity dwindles, with unknown speculators taking unusually large positions in calendar-spread options (CSO). In this high-risk derivative play, traders are placing bets on how much prices between two months for U.S. crude oil futures – in this case April and May – are expected to move. In particular, traders are using the vehicle to bet that once Cushing fills, April’s prices will plummet relative to those of May. On Friday, 4,500 put contracts for the April/May spread traded at negative $3.50 a barrel at a premium of 10 cents, data from the CME Group showed on Monday. As a result, open interest in that contract leapt to 4,500 from 200. The trades are valued at nearly half a million dollars. The signs of a blowout may be increasing. On […]