Short sellers heavily bet on a crash in crude oil, most facing significant losses

ME News message: On April 2 (UTC+8), a batch of crude oil traders aggressively went short, betting that oil prices driven by war would retreat from their highs. However, so far, most traders have suffered a major setback. Data shows that in March, ETF investors poured $977 million into the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), setting a record for the fund’s largest single-month net inflow since it was established in 2008. SCO provides two times the inverse return of crude oil price movements on a daily basis. Despite record inflows, SCO’s total assets are still only $970 million, lower than the total inflows for the full month.

Asym 500 founder Rocky Fishman said: “This is a bet that ‘the war ends soon’.” After President Trump once again hinted that the Iran war might be coming to an end, the fund rose 8%, but it still fell 41% in March, recording the worst performance in nearly six years. However, short bets are only half the picture—long funds also hit records. In March, the United States Oil Fund (USO) attracted about $700 million in inflows, the largest monthly inflow since the pandemic. The U.S. Brent crude oil fund (BNO) pulled in $600 million, the highest ever in its history. The market is highly split, with leveraged capital hedging against both sides’ bets. (Jin10) (Source: ODAILY)