How Options-Hedging Turbocharged Oil Volatility

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Oil has traded this year within a relatively narrow price range. Storage tanks at a California refinery.

.css-1i2ud9c-CreditTag{font-weight:400;text-transform:uppercase;} Photo: BING GUAN/REUTERS

.css-mbn33i-AuthorLink{color:var(--interactive-text-color);font-style:var(--font-style-italic);}.css-mbn33i-AuthorLink:hover{-webkit-text-decoration:none;text-decoration:none;} David Uberti .css-kx7fw8-FollowButton{display:inline;margin:0 8px;}.css-kx7fw8-FollowButton ufc-follow-author-widget:not(.hydrated){display:inline-block;width:60px;}

Bob Henderson

Joe Wallace

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The economic fears gripping Wall Street have sparked outsize swings in oil prices, exacerbated by trading that investors and analysts say has little to do with the fundamental value of crude.

One culprit is an arcane area of trading known on Wall Street as delta hedging, aimed at reducing the risks tied to directional price moves.

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Oil has traded this year within a relatively narrow price range. Storage tanks at a California refinery. .css-1i2ud9c-CreditTag{font-weight:400;text-transform:uppercase;} Photo: BING GUAN/REUTERS. .css-mbn33i-AuthorLink{color:var(--interactive-text-color);font-style:var(--font-style-italic);}.css-mbn33i-AuthorLink:hover{-webkit-text-decoration:none;text-decoration:none;} David Uberti .css-kx7fw8-FollowButton{display:inline;margin:0 8px;}.css-kx7fw8-FollowButton ufc-follow-author-widget:not(.hydrated){display:inline-block;width:60px;} Bob Henderson. Joe Wallace. print. Listen to article. (2 minutes) The economic fears gripping Wall Street have sparked outsize swings in oil prices, exacerbated by trading that investors and analysts say has little to do with the fundamental value of crude. One culprit is an arcane area of trading known on Wall Street as delta hedging, aimed at reducing the risks tied to directional price moves. What's News. .css-1ssco59-Link{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;gap:16px;-webkit-text-decoration:none;text-decoration:none;gap:8px;min-width:219px;} .css-1c8janm-ImgWrapper{position:relative;height:100%;}.css-1c8janm-ImgWrapper img{border-radius:2px;object-fit:cover;}.css-1c8janm-ImgWrapper svg{position:absolute;bottom:0.6em;left:0.3em;}.css-1c8janm-ImgWrapper svg use{fill:rgba(0, 0, 0, 0.7);} .css-qd7b40-Headline{font-size:18px;font-weight:var(--font-weight-bold);line-height:20px;color:var(--primary-text-color);font-family:var(--article-subhed-font-family);margin:0;display:-webkit-box;overflow:hidden;-webkit-box-orient:vertical;-webkit-line-clamp:3;font-size:16px;font-weight:var(--font-weight-medium);line-height:24px;font-family:var(--font-font-stack-retina);font-style:var(--font-style-normal);} Israel’s Netanyahu Suspends Judicial Overhaul Plan as Protests Intensify .css-d19tje-TimeTag{font-family:var(--font-font-stack-retina);font-size:12px;line-height:15px;padding:0px;margin:0px;display:inline-block;font-weight:300;color:var(--secondary-text-color);font-size:14px;line-height:20px;color:var(--color-red);font-size:14px;line-height:20px;}.css-d19tje-TimeTag:after{content:'';} .css-1tq2rt6-StyledTimestamp-TimeTag{font-family:var(--font-font-stack-retina);font-size:12px;line-height:15px;padding:0px;margin:0px;display:inline-block;font-weight:300;color:var(--secondary-text-color);font-size:14px;line-height:20px;color:var(--color-red);font-size:14px;line-height:20px;}.css-1tq2rt6-StyledTimestamp-TimeTag{font-size:13px;font-weight:350;line-height:16px;font-family:var(--font-font-stack-retina);margin-top:8px;color:var(--secondary-text-color);font-size:12px;font-style:var(--font-style-normal);}.css-1tq2rt6-StyledTimestamp-TimeTag:after{content:'';} 11 hours ago. 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