File 022260
Email Chain Regarding Oil Options Trading Strategy (File 022260)
Email correspondence between Vinit Sahni, Nay Gupta, Paul Morris, and Tazia Smith discussing oil options trading strategies and geopolitical risk analysis related to the Ukraine crisis and potential market impacts in March 2014.
Summary
Nay Gupta provides detailed analysis of oil options trading opportunities in response to geopolitical tensions, specifically the Ukraine crisis and Crimea referendum. The email discusses Deutsche Bank's decision to stop market-making OTC oil options and recommends exchange-traded alternatives. Gupta outlines a bearish scenario for European markets based on expected sanctions and proposes specific WTI call option strategies with varying expiration dates and strike prices, while offering to source additional liquidity through colleagues.
From: Vinit SahniSent: 3/14/2014 2:24:19 AMTo: jeeyacation@gmail.comCC: Paul MorrisSubject: Re: Oil optionsAttachments: graycol.gifImportance: HighClassification: External CommunicationI am on a plane to and from tokyo tomorrow next 2-3 days, if u need something otherwise available 24/7 on +447703720599.Vinit Sahni-----Original Message-----From: Vinit SahniSent: 03/13/2014 09:47 PM EDTTo: jeevacation@gmail.comCc: Paul MorrisSubject: Fw: Oil optionsClassification: External CommunicationJeffrey - apologise if this long to execute next time well be much quicker.Nay Gupta-----Original Message-----From: Nay GuptaSent: 03/12/2014 09:35 PM GDTTo: njeevacation@gmail.com" <jeevacation@gmail.com>Cc: Tazia Smith; Paul Morris/db/] Vinit Sahni/db/Subject: Oil optionsJeffreyJust got off the phone with Vinit.DB stopped marketmaking OTC oil options - for short dated Pd go for exch traded - better liquidity and lower transaction costs in andout.My central scenario - Kerry Lavrov meeting Friday will be a bust and the Crimea referendum this weekend will result in "yes" giventhe 59pct ethic Russian makeup. Sunday/ Monday sanction rhetoric from ranging from g8 expulsion to Iran-style bank embargo israised a notch. Russia follows with more threats of counter-sanctions. My sense is the Obama 5m of 696m SPR release is to showMerkel and co he will step in. He needs to because there are 8 small European and Baltic countries that rec 70%+ of their gas fromRussia. Germany gets 30%.Cross asset correlations outside of the US are increasing past few days - eg copper and the Turkish lira hourly charts are on top of eachother past 4 days. I'm worried there is a 30-40pct(?) chance of a hard risk off move in markets in first half of next week - more focusedon European equities, copper, EM FX (Turkey, ZAR, Ruble etc) than SPX. In that scenario oil is way up.Exchange WTI calls - there are 2 options (as of 3pm est):5day expiry 17march 2014 underlying clj4 97.92and35d expiry 16apri12014 underlying clk4 97.59** The 5 day options are a bit short - one possibility is sell a 3usd out of the money put (95.5 strike) for 20cents and buy a 2usd OTM100 call for 25. Net pay Scents. But 5d is a bit short for me.**For 35d expiry You could look at selling 91.50 (6usd OTM put) for 56cents and buying 103c (5.5usd OTM) for 58cents or the 102c(4.5usd OTM) for 76cents.HOUSE OVERSIGHT 022260CL1 <comdty> OMON on Bloomberg has live strikes and bid/ask.If 5d is too short and 35d is too long / not enough gamma, Tazia may be able to source liquidity from the street. Am Cc'ing her for anylive pricing or additional commentBestNaychThis e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mailin error) please notify the sender immediately and delete this e-mail. Any unauthorized copying, disclosure or distribution of thematerial in this e-mail is strictly forbidden.Please refer to http://www.db.com/en/content/eu disclosures.htm for additional EU corporate and regulatory disclosures and tohttp://www.db.com/unitedkingdom/content/privacy.htm for information about privacy.HOUSE OVERSIGHT 022261