Wall Street Speeds Up Oil's Plunge
- Banks cover options ‘negative gamma’ by selling futures
- Some producers are said to be taking profits on hedges
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For the second time in a week, Wall Street banks accelerated an oil plunge as they covered exposure to producers’ hedges.
Oil tumbled below $53 a barrel for the first time in a year on Tuesday, at one point slumping more than 7 percent in London and New York. The selloff -- just like the previous Tuesday -- was exacerbated by banks selling futures to rebalance their positions as prices fell, said people active in the market who are familiar with the matter.