Bets oil will hit $100 a barrel surge on fears of wider Middle Eastern war
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 04 2024
0mins
Should l Buy CME?
Source: MarketWatch
Bullish Oil Market Sentiment: Options traders are increasingly betting that oil prices could reach $100 a barrel due to escalating tensions between Israel and Iran, which may disrupt crude oil supplies.
Record Open Interest in Call Options: The November $100 call options have reached a record open interest of 18,628 contracts, while December options also saw significant activity with 41,424 contracts, marking the highest levels since September.
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Analyst Views on CME
Wall Street analysts forecast CME stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for CME is 285.90 USD with a low forecast of 209.00 USD and a high forecast of 320.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
4 Buy
4 Hold
2 Sell
Hold
Current: 302.270
Low
209.00
Averages
285.90
High
320.00
Current: 302.270
Low
209.00
Averages
285.90
High
320.00
About CME
CME Group Inc. provides a derivatives marketplace. The Company enables clients to trade futures, options, cash and over the counter (OTC) markets, optimize portfolios, and analyze data. It exchanges offer a range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange (FX), energy, agricultural products and metals. It offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and FX trading on the EBS platform. In addition, it operates central counterparty clearing provider, CME Clearing. Its products provide a means for hedging, speculation and asset allocation related to the risks associated with, among other things, interest rate sensitive instruments, and changes in the prices of agricultural, energy and metal commodities. It provides clearing and settlement services for a range of exchange-traded futures and options on futures contracts and OTC derivatives.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Historical Enforcement Actions: This division has a history of prosecuting significant cases, including actions against traders on the Chicago Mercantile Exchange in the late 1980s and recent civil charges against cryptocurrency fraudsters like Sam Bankman-Fried.
See More
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Record Highs for Precious Metals: Gold and silver prices reached unprecedented levels, with gold at $5,626 per ounce and silver at $121 per ounce, coinciding with a decline in the dollar's value.
Factors Influencing Market Trends: The "Sell America" trade gained traction due to various factors, including tensions with NATO allies, concerns over national debt, and expectations regarding the appointment of a dovish Federal Reserve Chair.
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- Resolution of Delays: The issue causing the delayed public publication of metal settlements has been resolved.
- Impact on Stakeholders: This resolution is expected to positively impact stakeholders awaiting the publication of these settlements.
See More
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- Extreme Price Volatility: On Thursday, spot silver prices fell by 13% to $76.97 per ounce, while futures dropped over 8%, reflecting extreme market volatility that undermines investor confidence.
- Speculative Trading Impact: Analysts indicate that recent price swings are primarily driven by speculative flows and leveraged positions rather than physical demand, suggesting unstable market sentiment that could lead to further price corrections.
- Increased Margin Requirements: The CME Group raised margin requirements following last Friday's steep sell-off, a move that may suppress speculative activity and impact market liquidity, potentially exacerbating price volatility.
- Market Comparisons: The volatility in silver prices has drawn parallels to meme stocks like GameStop from 2021, with market watchers warning that silver prices have detached from sustainable levels, which could lead to increased speculative trading and market instability.
See More
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- Own Cryptocurrency Exploration: CME Group CEO Terry Duffy confirmed during the latest earnings call that the company is exploring the potential launch of its own cryptocurrency, marking the first time CME has explicitly floated the idea of issuing a proprietary asset on a decentralized network, which could have significant implications for industry participants.
- Tokenized Cash Collaboration with Google: CME is working with Google on a 'tokenized cash' solution set to launch later this year, involving a depository bank facilitating transactions, which will provide essential infrastructure support for CME's cryptocurrency initiatives.
- Technical Breakthrough and Stock Movement: CME's stock rose by 1%, successfully breaking out from an inverse head and shoulders pattern with a target price of $320, and technical indicators show strong bullish signals, further solidifying the company's position in the crypto market.
- Record Trading Volume: CME's crypto trading volume hit records last year, with an average daily trading volume reaching $12 billion, and micro-ether and micro-bitcoin futures contracts were top performers, indicating strong growth potential for the company in the cryptocurrency finance sector.
See More
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- Revenue Growth: The company achieved $1.65 billion in revenue for Q4, slightly above the consensus of $1.64 billion, and up from $1.54 billion in Q3 and $1.53 billion in the same quarter last year, reflecting robust market demand.
- Increased Transaction Fees: Clearing and transaction fees rose to $1.33 billion in Q4, up from $1.23 billion in both Q3 and the previous year, demonstrating heightened trading activity and engagement.
- Market Expansion Plans: CME Group aims to enhance the $80 billion in average daily margin efficiencies through initiatives like U.S. Treasury clearing, 24/7 cryptocurrency trading, and prediction markets, showcasing a proactive approach to future market opportunities.
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