FxWirePro: Short WTI crude futures or arbitrage

The technicals for this commodity suggest sell indications as there RSI signaling downward convergence with the slumping prices (currently RSI 14 trending at 44.9779).

While slow stochastic approached below 20 levels but there is no convincing %K crossover (currently %D line at 8.2174 & %K line at 10.1190), so overall we don't see any sort of strength in this commodity that can pull back from current levels.

We spotted out the series bearish candles like dojis and current price has fallen below moving average curve.

Trade tips: Crude futures

Light Sweet Crude Oil (WTI) futures and options are the world's most actively traded energy product. WTI plays an important role in managing risk in the energy sector worldwide because the contract has the most liquidity and most transparency.

So from current levels keeping speculation mindset we recommend shorting near month futures for target towards $42.22 levels again, however short term traders keep a strict stop loss at 46 levels. Thereby, we have attractive risk reward ratio.

If puts are overpriced relative to calls, the arbitrager would sell a naked put and offset it by buying a synthetic puts. Similarly, vice versa when you think calls are getting overpriced in relation to puts.

Arbitration can also be possible through box spreads where buying debit call spreads and debit put spreads for a risk-free returns.

The opportunity for arbitrage in options market exists once in blue moon for individual investors as price discrepancies often appear only for a few moments.