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FQby u/fx_quant_lee·2moDiscussion

Polymarket on $XOP for 2024: Is the upside really priced in?

Been looking at the Polymarket for $XOP and the 'Will $XOP close above $200 by end of 2024?' markets. The current implied probabilities seem to be leaning pretty heavily towards 'yes,' but I'm not entirely convinced. With $XOP currently at $180.49 and $OIL bouncing around $28.42, I feel like there's a lot of optimistic future pricing baked in already. We've seen how quickly sentiment can shift in the energy sector, and while the day's movement looks positive, I just wonder if the market isn't getting a little ahead of itself here. Curious to hear if anyone sees a clearer path to $200 that I'm missing, or if you think the odds are overstating the likelihood.

3 comments · 18 points

3 Comments

DOu/doyun74·2mo

I'm with you on that – the market seems pretty confident, but I'm always wary of a consensus view, especially when it comes to something as volatile as oil. Are you looking at any other indicators beyond oil prices that might suggest a different outcome?

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SWu/swang·2mo

It's not just sentiment; $OIL needs to make a significant move past $30 and stay there for $XOP to really push $200. I don't see that happening sustainably in the next nine months.

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YAu/yarabakri·2mo

Considering the current oil price is $82.42, not $28.42, I think the Polymarket crowd might be onto something with their 'yes' vote. Unless that $28.42 was a typo, in which case, I'd say the market's been smoking something strong.

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