As U.S. crude prices dropped below $0 for the first time ever on Monday, some options investors were betting on a rebound.
Call options - used for upside participation - accounted for around two-thirds of the 3.5 million options contracts traded Monday on the United States Oil Fund LP, the largest U.S. crude exchange-traded fund.
The bullish wagers were likely driven by investors betting that oil could mount at least a medium-term bounce after a rout that has seen prices crushed on concerns of oversupply, analysts said. Although USO shares fell sharply on Monday, they did not tumble nearly as much as expiring May futures for U.S. crude, which plummeted 306% to -$37.63 a barrel. The fund had rolled its positions earlier this month into June contracts for West Texas Intermediate crude, which fell 18% to $20.43 a barrel.
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