A New Kind Of Oil Price Speculation

A New Kind Of Oil Price Speculation by Cook & Bynum

Sometimes structured products are only masquerading as investments, when in reality they are time-bound gambling vehicles.  Jason Zweig recently highlighted a case study where “investors” were simply speculating with options on near to intermediate-term oil price movements.  We suspect that the originating banks will prove to be the biggest winners from these bets.

In 2015, units of Bank of America Corp., Citigroup, Credit Suisse Group AG, Goldman Sachs Group, J.P. Morgan Chase & Co., Morgan Stanley, UBS Group AG and other top financial firms issued at least 300 “structured notes,” or short-term borrowings, whose returns...