| Account | Shares | Price | Value | % of acct | Cost/sh | Gain $ | Gain % | Target |
|---|---|---|---|---|---|---|---|---|
| 401K | 333 | $56.02 | $18,655 | 0.76% | $53.67 | $783 | +4.4% | — |
| HSA | 51 | $55.74 | $2,843 | 2.63% | $53.71 | $104 | +3.8% | — |
| RLT | 55 | $56.02 | $3,081 | 0.18% | $53.50 | $139 | +4.7% | — |
| Total | 439 | $24,578 | 0.55% | $1,026 | +4.4% | — |
In short: His long Brent vehicle is now a short-squeeze setup: price up 50%+ while AUM is only ~20% above July lows, shares outstanding falling (~11.8→10.1mm in two weeks) and short interest at an all-time high (~2.2mm shares, over 20% of shares outstanding) — "the mechanical signature of 'the market is fading this rally'," with borrow "starting to look…provocative." "I think oil is about to scream higher and am worried I don't own enough."
BNO is a fund that tracks the price of Brent crude oil by holding near-dated oil futures. Paulo has used options on it as his main oil bet for months, and this post argues the setup has become unusually explosive.
The key is how ETFs work. When lots of people want to bet against a fund, dealers can manufacture new fund shares and lend them out to short sellers — that is what happened to ARKK in 2022. With BNO the opposite is happening: the price is up more than 50%, yet the number of shares in existence is shrinking (big holders cashing out) while the number of shares borrowed and sold short has hit a record, over a fifth of the whole fund. In other words, a lot of people are betting the oil rally fails, and they are doing it in a vehicle that is getting smaller.
If oil keeps rising, those short sellers must buy shares back — from a shrinking pool — and the cost of borrowing the shares is already climbing ("provocative"). That is the recipe for a short squeeze, where forced buying pushes the price up faster. Combine that with speculators in the futures market being far less crowded than earlier in the year, options markets pricing little risk of a jump, and storage cushions worn down, and he concludes oil is "about to scream higher." He is already "pretty long" and worried he doesn't own enough. Not financial advice, as he says.
In short: The expression of the "Second Mouse" re-entry: "Oil remains my largest position by a wide margin on a delta and volatility adjusted basis. I own a variety of calls and call spreads on BNO and related underlying futures with expiries ranging from August to January." Conviction in a "Guns of August blowout of epic proportions has never been greater" — positioning is "too low" (~US$26bn combined net long vs $64bn at the 1Q peak; Brent managed money 7% of OI) while backwardation sits at 2Q22 $100-125 levels and cracks lead crude. "As always, I would not listen to me."
BNO is an exchange-traded fund that simply tracks the price of Brent crude oil via futures contracts, so buying it is a clean way to bet the oil price rises. Paulo isn't just buying the fund — he owns call options and call spreads on it (a call is the right, not the obligation, to buy at a set price by a set date; a call spread buys one and sells a higher-strike one to cut the cost). Options give leverage: a modest rise in oil can multiply the option's value, and the most you can lose is what you paid. His expiries run from August to January, so he is paying for several months of chances rather than betting on one week.
The thesis is about who owns oil, not just what oil is worth. Earlier this year a very large crowd of speculators was long crude; then China quietly stopped buying and Trump talked the price down, and that crowd was wiped out — "run over and killed in the mouse trap." Paulo calls the second entry, after the first crowd has been carried out, "the second mouse gets the cheese": the reasons to be bullish are unchanged or better, but everyone who tried it already has the scars and won't come back — so there is nobody left to sell and a "wall of worry" for the price to climb.
His evidence is the weekly CFTC positioning report (who holds how many futures). Even though Brent rallied from about $70 to $91, the record bet against oil has barely been unwound in dollar terms, and the overall bullish position — about $26 billion, versus $64 billion at the March peak — is smaller today at $91 oil than it was in 2024-25 when oil was $75-85. In other words, the price says one thing and positioning says another; that gap is the setup. Open interest (the total number of contracts alive) has shrunk too, meaning existing bruised longs are selling to shorts who are buying back, with no new money arriving.
Two more confirmations. The physical market — the price of an actual cargo for immediate delivery, and the premium of near-dated barrels over later ones ("backwardation") — is at levels last seen in spring 2022 when Brent traded $100-125. Backwardation means buyers are paying up for oil now, "screaming for crude to come to market" — a shortage signal. And refining margins ("crack spreads," the profit from turning crude into diesel and gasoline) have ripped higher; his "Jaws of Death" observation is that those margins lead and crude follows, as it did in March-April. Add his geopolitical view (an August escalation with Iran while Trump is politically vulnerable into midterms) and this is his largest position by a wide margin — while he freely admits the same thesis cost him money earlier this year.
In short: His position remains long (Brent his largest expression). No short position of significance in BNO (8% short interest vs the WTI products' crowd); a "perfect Flush" of the mid-April low plus a striking internal divergence — BNO as oversold on RSI as at the Dec-16 $60 Brent low, yet priced above its early-March relative-strength peak thanks to roll yield in backwardation.
BNO is an ETF that tracks the price of Brent crude oil (the global benchmark) by holding oil futures. It's Paulo's biggest oil bet and he is still long. Unlike the WTI funds, almost nobody is betting against BNO (only 8% of its shares are sold short). Technically he likes what he sees: Brent just "flushed" — briefly broke below its April low and snapped back, which he reads as sellers exhausting themselves before a turn.
There's also a quirk that works in BNO's favour called "roll yield." When near-dated oil is more expensive than later-dated oil (called "backwardation"), a fund that keeps rolling its position forward effectively buys cheaper each month and pockets the difference. That's why BNO can be just as beaten-up on momentum gauges (its "RSI") as it was at the December low when Brent was $60, yet still trade at a higher price than it did at its March peak — the roll yield has quietly added return on top of the flat price.
In short: His largest position by a wide margin, primarily via calls across Jul-26→Jan-27 strikes (bought aggressively as recently as Friday) to collect roll yield in Brent's backwardation. +78% YTD; the cleanest expression of the inventory-draw thesis.
BNO is an ETF that tracks the price of Brent crude (the global oil benchmark) through oil futures. It is Paulo's single biggest bet — and he's making it mostly with call options, contracts that pay off if oil rises above a set price by a set date (here, expiries running from July 2026 out to January 2027). Calls give convexity: limited money at risk for an outsized payoff if oil spikes the way he expects.
Two extra tailwinds. First, roll yield in backwardation: when near-dated oil futures cost more than far-dated ones (a "backwardated" market, typical when supply is tight), a fund like BNO that keeps selling expiring contracts and buying cheaper later ones earns a small positive carry each month — the structure pays you to wait. Second, the squeeze setup: because nervous traders have moved from futures into options, the dealers on the other side are short calls in a thin market; if oil climbs they may be forced to buy futures to hedge, pushing it higher still — exactly the kind of self-reinforcing move calls are built to capture.
In short: His continued core oil expression — "I continue to be long BNO (Brent front month ETF which accretes the roll yield), an assortment of calls therein." This week he also layered in shorter-term WTI callspreads given the significant lack of positioning (an admittedly "dangerous" add, since he still thinks US export restrictions are highly likely, which would strand WTI vs Brent).
BNO is a fund that simply holds Brent crude oil (the global oil price). Paulo stays long it plus some call options, and this week added a second, more tactical bet: short-dated "call spreads" on US oil (WTI) — a cheap, defined-risk way to profit if US oil pops in the next few weeks, which he added because almost nobody is positioned for it. He calls that add "dangerous" for a specific reason: he still expects Washington to ban US oil exports, which would trap US oil (WTI) cheap at home while global oil (Brent) spikes — so his core money stays in Brent. His whole case is that fuels (gasoline, diesel, jet) are already scarce and US oil storage at Cushing is draining toward levels it physically can't go below, so within weeks America has to either stop exporting or let prices rip. The signal he's watching for the ban: US oil starting to trade unusually cheap versus global oil.
In short: Owns the active Brent July26 future; assets down to ~$800mn. His chosen expression — "I continue to hold crude oil as my single largest allocation by a large margin, mostly reflected through Brent (BNO), outright and via calls." The clean way to be long the inventory-draw thesis (and to sidestep the WTI-jurisdiction/export-ban risk).
BNO is a simple fund that holds Brent crude oil futures (the global oil price, as opposed to the US-specific WTI price). Paulo says this is where the bulk of his money is — "crude oil as my single largest allocation by a large margin, mostly reflected through Brent (BNO), outright and via calls." His whole argument is that the world is quietly running its oil tanks down toward the point where they physically can't go any lower, and when that hits, the price should jump sharply rather than smoothly. He prefers Brent over the US oil price partly because if Washington bans US oil exports, WTI could get stranded and cheap while global Brent spikes — so Brent is the cleaner bet on the shortage.
In short: His preferred oil expression. A front-month Brent roll-yield vehicle: in backwardation it sells the expiring front and buys the cheaper 2nd month, accreting the "roll yield" to NAV — over 4 years BNO was +50% vs Brent flat price -25%. He's buying it outright and via ~30-delta 6- and 12-month calls (mid-30s implied vol). Prefers BNO over USO because if oil rallies hard, a Trump US crude-export ban would favor East-of-Suez (Brent) barrels over US (WTI).
BNO is an exchange-traded fund that owns the nearest-dated Brent crude oil futures contract, so its price tracks oil. Paulo's key insight is the "roll yield": when the oil futures curve is "backwardated" (near-dated oil is more expensive than later-dated oil — the normal state lately), the fund constantly sells its expiring contract high and buys the next month cheaper, and that small gain compounds into NAV even if the oil price itself goes nowhere. He shows that over four years BNO returned +50% while the Brent spot price actually fell 25% — the backwardation did the work. So he's buying BNO outright and through 6- and 12-month call options (a cheap, capped-loss way to get leveraged upside).
Why Brent and not US oil? If oil spikes, he expects Trump — despite being "the most pro-free-market President" — to slap on a US crude-export ban (his tongue-in-cheek "Shrub's Razor": the most absurd outcome is the likeliest). That would cap US (WTI) prices while international (Brent, "East of Suez") barrels keep rising — so Brent/BNO is the safer bull vehicle.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.