Traders Hedge Oil ETF While Energy Stocks Lure Buyers
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Options traders are signaling energy companies have become too cheap to pass up, even as they build up protection against a further drop in oil prices.
A collapse in global demand means oil may have more to fall, and hedging costs on an exchange-traded fund tracking crude climbed to the highest levels since June 2012. Yet wagers on the Energy Select Sector SPDR Fund haven’t kept up: They’re about 19 percent cheaper and reached a two-year low versus the United States Oil Fund LP, data compiled by Bloomberg show.