Discussion of a trade idea involving a long-dated knock-in call option on WTI crude oil, with the expectation that crude prices will fall in the short term but rally in the long term. The option has a strike price of $100/bbl, expiring on 14-Nov-18, and only activates if the CL1 settlement price falls below $55/bbl before expiry. The offer price is $1.12/bbl, compared to $4.30/bbl for a vanilla call. Potential for high payout if oil prices drop to $50 and then rise to $125.
documents/vol00010-efta01365192-pdf.pdf
{"key_people":["Daniel Sabba"],"document_type":"correspondence","document_subtype":"memo","key_organizations":["Deutsche Bank Securities"],"reference_numbers":["DB-SDNY-0055865","SDNY_GM_00202049","EFTA01365192"]}