A $50,000 Oil Arbitrage Trade (BZ / BNO)

**This trade centers off the drastic mispricing between Brent Oil Futures and Physical Brent Prices.** Anybody with lick of common sense can see that the oil market is **heavily** manipulated, but in 20 days the June Brent Contracts will be coming due and will need to be Financially Settled for the physical barrel equivalent. This disparity is likely to lead to a DRASTIC spike in BNO / BZ prices. **What is happening?** Brent Oil futures for June are trading at $94.50. Meanwhile real physical barrels are trading at $144. One of two things could happen over the next 20 days. The physical price could fall thanks to a sudden influx of world peace. OR the futures price could converge in a way that is truly insane. There are 2 ways to leverage play this trade. **1) May 26 BNO Call Contracts.** BNO is an ETF that buys current month Brent oil contracts and rolls those contracts on the final day of trading (last day of the month). If Brent rises to $144 BNO will rise to roughly $60-$70 from today's price of $47. 2) **BZM6** (June Brent futures contracts) are financially settled contracts for 1,000 barrels. Although the floating paper value can be heavily manipulated, on the last day of trading (April 30th) the paper and physical will have to converge, and right now the spread between paper and physical is the largest we have ever seen in history. **Positions and Disclosure:** I am a retail options trader not a financial or oil pro. I hold open positions in Brent Oil futures. These positions are extremely volatile. This should not be construed as financial advice. BFLO-Retail [Bloomberg Terminal Showing Physical Oil Prices](https://preview.redd.it/o18qrj1vbfug1.jpg?width=1243&format=pjpg&auto=webp&s=888ea44a69b32f4605e6eff724012f3289b8f576)