Hello, everybody. This is the Friendly Bear podcast where we interview some of the best and brightest traders in the trading community. Listen to inspiring stories and nuggets of insight from current and future game changers in the trading space. Listen and learn as we explore all types of trading niches with some of the best in the industry from a Friendly Bear point of view. Make sure to check out the Friendly Bear podcast YouTube channel called The Friendly Bear, Verified Trader, which includes all the podcast video content and supplemental screen shares. If you enjoy the podcast, please consider leaving a five-star review on iTunes. I'm also proud to announce the Friendly Bear Conference in Mexico City that will be on Saturday, May 30th at the beautiful Four Seasons Hotel, Mexico City. Join me for an amazing conference you don't want to miss. Tickets are going fast and are available in the show notes. With all of that being said, I'm your host, David, a.k.a. Reverse Long, and this is the Friendly Bear Podcast. Let's dive in. at least like 12 miles an hour. So in order to go from all the way from almost mid-Asia down to Africa, all the way back up into America, takes them like three to four months. Trump is playing out of the deal right now. Now that he has control of Venezuela, he might get control of Iran, who is hurting the most, his enemy. Yeah. They're either going to take Trump's side or they take Iran's side and they're going to de-escalate. And it's going to happen very quickly. If they don't do that, every country is going to be super effective okay so over here so mehul um what do you think about all that's going on right now in the middle east and how that's affecting uh the futures market and because i know that's your world with the whole futures and oil and how you trade so also i'm a fundamentals and technicals based trader so i almost i think from what i understand you're more technical based. I'm interested to hear your take on what's going on in the world and how that affects your trading, if at all. Right now, in the future space, it's super volatile. It's insanely volatile. VIX is currently above 30. For us, oil typically, back in the day, was moving between $3 to $4 to $4 a day. Now, we're moving $10 to $15 a day, which is insane. And when you're trading one futures contract, for us to just take one contract long for $10, we're making a grand or 10 grand essentially on that. So, you don't need a lot of size because if you do use a lot of size right now, I've seen so many people get liquidated. Even some of the guys that we know, I know one of our friends, close friends that we know together, he probably lost like 200K shorting oil on that entire spike up. So back in November inside of my community, I mentioned to everyone that oil is sitting around 72. The likelihood of oil getting to 120, if things escalate the way I assumed they were going to escalate back in November or so, we're going to hit 120. And we weren't shy. We were like 118. So the prediction was almost on point. And the reason for that is due to many different factors. And I think we can go higher. Do you know what's going on? Let me ask you this question. Do you know what's going on with, or how the U.S. gets its oil from the whole Iran situation or what that looks like as of right now? No, so I don't keep, this is not my world. I don keep track of this stuff at all I focused in a niche of small caps and short selling really bad companies yeah um i do glance at the overall markets but you know like uh i focus all my energy on just finding bad companies so from what i understand like the straight of hormuz and all this uh back and forth that you know the trump and uh and the and iran are doing is something to do with it but like That's why I like having friends like you that are in that world and that I trust their opinions and you guys can give me the lowdown. You know what I'm saying? And it makes my life easier to make a decision. Yeah. So I guess the lowdown on what's currently going on, the way oil works from like a fundamental standpoint, which might make more sense to you, is that shipments of oil get taken from right now, straight up on yours in this case. and they get shipped over down the Cape of Good Hope all the way up to America. Essentially, that's the main passageway that they go to get oil to America. That entire process takes between, I think ships on average, oil tankers, they move at least 12 miles an hour, 12 to 15 miles an hour. So super, super slow. So in order to go from all the way from almost mid-Asia down to Africa, all the way back up into America, takes them like three to four months. So all the blockages that have happened, if you imagine it like a straight-up homoose is like a passageway, like a door, they've closed the door, but a lot of ships have exited the door already. There's a lot more that haven't filled up and gotten out. The ones that are on their way over to the US are why we haven't seen the massive influx. You've probably seen it in LA and I've seen in Florida, prices go to $4, $5 per gallon in Florida. In LA, it's probably $7 or something like that. But that's not even close where we can get to if this thing remains closed, because all these shipments are still on their way over. So there's a lot of supply floating in the ocean. A lot of supply is still floating in the ocean. And it's on their way over. Once that's finished and used up, and that choke point is still there, that's when everything can escalate. And the price of oil can go from $120 to about $150. Now, it's not a bad thing. I think 150 for oil, if it sustains that for more than three weeks, we can see potentially a whole global recession, an entire worldly recession, if we sustain 150 for at least two weeks. If we don't sustain it for two weeks, we just see a spike and come back down, we won't see a global recession. We might see maybe an Asia recession, because Asia is 80% dependent on the Iranian oil, not the u.s the u.s is just like kind of playing uh big man at this point trying to stiff arms people into into deals but asia is the one that is dying the most like india specifically i think i see so a few things there now what about um other areas in the world with oil like for example venezuela or the u.s reserves does that have any effect or did you any consideration into all this What do you think? Yeah. So I have a strategy. So we all know Trump, right? So Trump, his famous book or whatever his thing is, Art of the Deal, right? Have you ever thought of why or the occurrence of all the events that he's done? He started with what? The first one was Venezuela. He took all their oil and basically conquered all of that. Then he went into, I think it was Colombia, right? And then he kind of did something over there. And now he's going after Iran. The reason why I think he did it in this order is because if he didn't take over Venezuela, his main rival is who? Who do you think Trump's main rival is? Iran? China. China, yeah. China is his main rival. Yeah, for sure. So he cutting off China supply of oil In fact the Chinese were in Venezuela about to get In fact the Chinese were in Venezuela about to They shaking hands with Maduro And then that same day that night they got him They got him, exactly. So my conspiracy or my theory is basically that Trump is playing out of the deal right now. He took over Venezuela because he knew China was going to go there after they did not get oil from Iran. Now that he has control of Venezuela, he might get control of iran who is hurting the most his enemy yeah that's that's this is all a game it's all a tactic for china i think i got you now what do you think of um do you think in with iran like uh because iran is like uh it's i'm pretty sure a lot of things that are going on right now weren't anticipated in that art of the deal is all like yeah how much as an engineer how much uh room for error do you think they they planned like a percentage wise and how much of that do you think is happening right now the trump administration yeah that margin for error so it's that one is hard to say honestly because sometimes i would think they're planning some strategy around this because he would say he wants to blow up like nuclear power plants he wants to blow up energy power plants he wants to do like he wants to decimate the entire country of iran we all know that's probably not going to happen because if he does that every country every person in the us is going to turn against him that's just like saying fugazi stuff right it's just like playing playing devil's advocate and what he's doing there but from like a strategic and risk standpoint, I don't know if they've actually thought that out too well. All they're doing is blowing up tons of missiles along the way to get their chokehold still stay on the sidelines. Because China has not yet fully interacted with all of this. They're just staying out. They're staying back. The moment they push forward is the moment that basically Trump's chessboard starts to play out and he's waiting on them to move. And yet they haven't moved. So they still hold, I think, the card. Gotcha. Okay. So now going back to the prices of oil in the market. So how do you think that's going to play out in the near term? Because I think the market's about to hit all-time highs again. So yeah, the market has done some really insane moves lately. So it's like it went down, then it went up. It's very volatile. So how do you think this is going to end up playing out, let's say, like six months from now, as far as the market, like the prices and stuff? Six months from now, depending on what happens, right? So it's very, very dependent on what happens in agreement between US and Iran. If there is no agreement and if there's no terms that they basically can get towards, we're going to see oil go from $100 to like 120 and then basically spike to 150. That will be the end of it. But before we even jump to like 120, a lot of these nations will step in at 120 mark and start like either taking one side or another. They're either going to take Trump's side or they take Iran's side and they're going to deescalate. And it's going to happen very quickly. If they don't do that, every country is going to be super affected. So in the long term, do i think we're going to have a global recession probably not because someone's going to step in it's going to be india it's going to be china it's going to be someone some big player and that was going to drive oil back down so what we're seeing right now is just a massive spike for maybe three four months and then later on it'll just come straight back down to normal gotcha and then finally i want to get your thoughts if you okay so first have you seen this like uh i think it's ai but uh this screenshot of interactive brokers saying someone got a delivery for 84 gallon barrels of oil or something i know the guy this is actually it really happened yeah can you can you break that down jesse yeah so when you trade futures you're trading a contract to basically buy a certain commodity at a certain price and if it executes itself then you actually owe or you actually can physically buy that so this guy he was trading oil he bought a futures contract back like a couple months ago um and if you look him up is have you know you know aziz yes yeah it's him it's him yeah yeah so that's his uh that's his screenshot that's going viral yeah so basically he bought a futures contract and it went to expiration because these contracts expire when they expire they mature and you basically like options, you have the right to purchase these shares of a stock. In this case, he has a right to purchase the oil barrels and they ship it to his house essentially, or wherever he's re-registered to. He had enough liquid assets in his account to afford the shipment. So what I saw on that screenshot was that they actually executed it for him and they're sending out the shipment. But if you didn't have enough funds like myself, yeah, in Oklahoma, yeah. If I don't have funds, I don't have millions like to buy oil with. They're just going to auto liquidate me. And then I make my spread on the, on the futures contract. Yeah. He's got too much money. So they just sent him the oil. That's yeah. So what's he going to do with his oil? Do you know? I don't know. I don't know what he's going to do with this. I think I actually don't know. I don't never, this is my first time experiencing it. I've seen it before once where it was on X and on Twitter where someone was like, oh i received all this oil and he sent a screenshot of like his warehouse full of barrels and i was like wow okay i think this is fake but this was back before ai yeah so i don't know if it was fake now i trust it so what happens with the oil like you sell he's gonna have to resell it yeah he's gonna have to resell it yeah he's just gonna have to either give it back to the refinery yeah or find some buyer for it yeah which he can still make money off right because he bought it he bought a futures contract at like probably 80 bucks oil is trading at a hundred dollars he can sell it to someone at 95 dollars all that oil like shell someone will buy it from him for 95 get all those barrels from him 2 000 barrels and then he's made his spread it wasn't as um on the futures contract he was probably trading maybe 10 20 contracts and he probably would have made like 30 40 000 on that contract like that trade itself but now that he's got physical oil and he's selling that physical oil, 2,000 barrels, and he's making like a $25 spread on each barrel, it's just going to add to like 10x that amount. Yeah. So the lesson there is don't have that much money in your account and then also watch to see when they're going to expire. Yes. Is that correct? Yeah. If you have a lot of money, then you should watch. If you don't have money, then it's fine. You're good. Yeah, you just get liquidated basically. Great. Yeah. all right man well thanks for coming on and explaining that to us yes i'll see you guys later that concludes today's episode make sure to like and subscribe to the channel on the platform you use? The Friendly Bear Podcast is hosted by me, David. You can find the Friendly Bear Podcast on Apple Podcasts, Spotify, and YouTube at The Friendly Bear, Verified Trader. Those who pre-order my book, Short Selling Master, send me a DM on X or Instagram at Reverse Long with a screenshot for free bonus materials. Until next time, thank you for listening to The Friendly Bear Podcast.
