Public trading strategy
Hedge funds bet big against oil ahead of Iran deal — short the crude crash
Thesis
If the US and Iran finalize a peace agreement, Iranian oil will flow back into the global market much more easily. More supply means lower prices. The fact that professional hedge funds are aggressively betting on this outcome suggests they see the writing on the wall, making the downside momentum in oil a high-probability trade.
Strategy approach
Build a momentum strategy that enters short USO (or long SCO) on the daily timeframe when price closes below the 10-day EMA and trading volume is above average. Exit conditions: 5% stop loss, or take profit at a 5% decline.