Oil, half a billion down bets before 'Taco-Trump'

To hell and back. This was the script that played out on the markets yesterday. In the morning a dangerous escalation in the conflict in Iran was feared, with cross-attacks on the energy infrastructure triggering an unpredictable change of pace in the conflict, when Wall Street opened everything changed. Stock markets reversed course, oil plummeted precipitously, the Vix fear index, which measures volatility, immediately deflated. Another 'wild monday' as insiders immediately dubbed it. And the script is always the same: 'Taco-Trade', or 'Trump, Always, Chicken, Out'. The US president had slipped into a dangerous dead end with the ultimatum to Tehran to reopen the Strait of Hormuz on pain of attacking its energy infrastructure. But it was a bluff. Iran chose to go and see it by responding in kind. And so the White House tenant found himself at a crossroads: keep his word at the cost of escalating an increasingly costly conflict, or back down at the cost of losing face? We know the exit strategy: a profusion of announcements made before the opening of the stock exchange that triggered the violent change of course in the stock markets. And little does it matter if, on the Iranian side, denials and scornful statements about it came: 'Fake news to manipulate the markets'. The markets chose to bet on 'Taco' and nothing seemed to make them

change their minds. But the question circulating these hours in the operations rooms is another: was anyone aware of the news in advance?

It is not a peregrine question judging by what the Financial Times has reconstructed in a piece that has gone viral in insider chats. According to what the City newspaper reconstructed, a patrol of evidently well-informed traders placed bets worth half a billion dollars on the oil market about 15 minutes before Donald Trump's post in which he spoke of 'productive' talks with Iran. "About 6,200 futures contracts on Brent and West Texas Intermediate," writes the FT, "were traded between 6:49am and 6:50am (New York time) on Monday, just a quarter of an hour before the US president's post on Truth Social in which he claimed that there had been "productive conversations" with Tehran in the previous few days to end the war in Iran. The notional value of these transactions - the newspaper calculated based on Bloomberg data - would be around $580 million. According to the FT's reconstruction, 'trading volumes on Brent and WTI rose sharply at the same time, 27 seconds before 6:50am. Futures linked to the S&P 500 stock index rose in price moments after the oil trades, with volumes also rising sharply at that time'. The question at this point is: who, in the midst of the worst oil crisis since 1973 and the worst conflict in the region since the Iraq war, had the guts to make a bearish bet on oil?

An answer is impossible to give from consulting the terminals. But some purely common-sense considerations can be made: it is implausible that those who placed these bets, and for such a large amount, did so without being more than sure that the market would make the reversal that then occurred punctually. The more than well-founded suspicion is that what took place yesterday was nothing more than a gigantic insider trading operation. A suspicion, indeed, that is nevertheless difficult if not impossible to prove. White House spokesman Kush Desai said: 'We do not tolerate any administration official illegally profiting from insider information, and any suggestion that officials are involved in such activities without evidence is an unfounded and irresponsible fabrication'. Words that nevertheless have to reckon with rather curious evidence reported by several hedge fund managers heard by the newspaper who, for several months now, have been observing market bets with decidedly curious timing. Particularly in the most speculative markets. Not to mention the Wild West of so-called 'prediction markets' such as Kalshi or Polymarket.

On these platforms it is possible to bet on anything: from the outcome of the constitutional referendum in Italia to the result of matches, even the occurrence of concrete events such as an Iranian missile hitting Israeli territory. Emanuel Fabian, a journalist for The Times of Israel, who was recently subjected to online death threats to correct the news he published about an Iranian ballistic missile hitting the town of Beit Shemesh, just outside Jerusalem, knows this well. Anonymous bettors had bet to the tune of $900,000 on the fact that this event would not occur by a certain date and thought it best to lash out at the journalist who reported the story.