View In Browser | Free Reports | Premium Services By John Pangere, Editor, Freeport Strategic Opportunities Syed Shah had a plan... On April 20, 2020, the 30-year-old from Toronto decided to use the $77,000 in his brokerage account to trade oil futures. Futures are promises to buy oil at a set price on a specific date – no matter what the market price is by then. If it’s higher than the price you paid for your futures, you win. If it’s lower, you lose. Shah was hoping he’d make a ton of money on a sure bet. But within a few hours, he lost $9 million. As you’ll recall, in April 2020 the world was in the early stages of the COVID-19 pandemic. The world was in lockdown. Demand for oil – especially for use as transportation fuel – evaporated almost overnight. With oil trading at $3.30 a barrel, Shah made a bet on higher oil prices by buying five futures contracts. He then added 21 more futures contracts as the oil price moved lower. In total, he scooped up $2,400 worth of oil futures in 40 minutes. Finally, when the oil price hit one cent, Shah went all in and snapped up another 212 contracts. Feeling confident, he shut off his screens and went about his day. The problem was the price of oil kept slipping. It went to minus $1, then minus $10, eventually settling at negative $37.63 by the close of trading. Although Shah almost certainly didn’t understand what was happening, traders holding futures contracts were rushing for the exits to avoid having to take physical delivery of oil. Because if that happened, they’d have to pay to store it. So, they were willing to pay other people just to offload the contracts. Shah panicked. He didn’t think the price of oil could go negative. Finally at midnight, he got a call from his broker. What started as $77,000 in his account ended up as a $9 million debt. Negative oil prices may be a thing of the past. But overconfident amateur traders are still with us. There’s no better example than the past two weeks during the “Twelve Day War.” | Recommended Link | | | | I’ve been a trader for 43 years, and managed money for America’s wealthiest: Silicon Valley CEOs, tech entrepreneurs, even pro-athletes. Today, I want to share my #1 income secret. It’s perfect for these uncertain times. In fact, my team has already used it to generate a 100% win-rate in 2025! The best part is, each trade comes with an instant cash-payout, as much as $100 to $1,000 upfront, deposited directly to your account. Incredibly, you don’t even need to own a single stock to collect these cash payouts. Click here now for full details. |  |
Threats That Led Nowhere When Israel attacked Iran on June 13, oil spiked more than 7%. When Iran retaliated, the price went higher. Then came the threats of closing the Strait of Hormuz – one of the key traffic points for shipping oil and gas around the world. The strait connects the Persian Gulf with the Gulf of Oman, eventually leading out into the Indian Ocean. 
About one-third of the world’s oil shipments pass through the Strait of Hormuz According to the International Energy Agency, about 30% of world oil shipments pass through it. That’s why Iran threatening to close it led a lot of traders to speculate on higher oil prices. It sounds logical, right? The problem is that Iran’s energy economy depends on allowing its oil and gas to leave its ports and head to their final destination. No one benefits – least of all Iran – with the Strait of Hormuz closed. That’s a problem if you’re betting on higher oil prices. But what about the specter of the U.S. entering the conflict and further escalation from Iran? That didn’t pan out in the oil speculators’ favor either. Buy the Rumor, Sell the News After the U.S. bombed three of Iran’s nuclear sites, the price of oil started crashing. It was a textbook case of “buy the rumor, sell the news” – where traders jump in before the news breaks, and cash out before the crowd reacts. 
That’s exactly what happened with the oil trade and the U.S. bombing run over Iran. So, next time some conflict breaks out in the Middle East… or threatens to… don’t rush to speculate on the oil price. What can seem like a no-brainer could lead to big losses. Or like poor Syed Shah, it could end up blowing up your account completely. Regards, | 
