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Earlier quoted context omitted.
> the net supply of derivatives (such as options, forwards, futures) is zero. so we believe, but yes. also CDOs have entered the chat
But CDOs have to have someone on each side the deal, hence net zero.
Earlier quoted context omitted.
A speculator does one thing only: takes assets not in (peak)demand today and bets they are gonna be in demand in the future. He takes a calculated risk and a lot of times it doesn't pay off. Everybody involved is getting paid and all the transactions are voluntary. If you think that is theft then I don't know what to tell you.
Well, a theft can be voluntary: that’s what con-artists do all the time!
I really wonder if those guys really created $500M worth of “value” for the rest of the world. Because if they didn’t, it means it’s theft...
Its a game that people play and there are winners and losers, but if everyone willingly enters then it is not theft.
It could be considered legalized gambling I guess but everyone involved is a gambler.
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It’s hard to find an equity that’s not up 40% since March lol —- the S&P is up 43% so that’s technically, shockingly a market underperform, and a bunch of tech companies are up 200% or more.
Yeah, though my outlook on oil is longer-term than current market trends. Don't worry I loaded up on tech stocks too
I really wonder if those guys really created $500M worth of “value” for the rest of the world. Because if they didn’t, it means it’s theft...
I think most people saw the opportunity, but just didn't know how to properly capitalize on it. At least that's where I was. I wasn't going to take delivery of any oil, that's for sure. At least nothing that stood to make anything significant from. Then, there was also the whole contango thing too.
Probably an urban legend, but still funny.
This thread seems to support the idea that you can't just receive your futures at home. But I guess even with a designated warehouse, you're stuck with the warehouse bill.
https://skeptics.stackexchange.com/questions/47421/have-any-...
I think most people saw the opportunity, but just didn't know how to properly capitalize on it. At least that's where I was. I wasn't going to take delivery of any oil, that's for sure. At least nothing that stood to make anything significant from. Then, there was also the whole contango thing too.
No retail trader is going to take delivery. The contracts would be forced closed or cash settled.
https://www.cmegroup.com/content/dam/cmegroup/rulebook/NYMEX...
200109. ALTERNATIVE DELIVERY PROCEDURES
A seller and buyer matched by the Exchange under Section 105.E. may agree to make and take delivery under terms or conditions which differ from the terms and conditions prescribed by this Chapter. In such a case, clearing members shall execute an Alternative Notice of Intention to Deliver on the form prescribed by the Exchange and shall deliver a completed and executed copy of such notice to the Exchange. The delivery of an executed Alternative Notice of Intention to Deliver to the Exchange shall release the clearing members and the Exchange from their respective obligations under the rules of this Chapter and any other rules regarding physical delivery.
In executing such notice, clearing members shall indemnify the Exchange against any liability, cost or expense the Exchange may incur for any reason as a result of the execution, delivery, or performance of such contracts or such agreement, or any breach thereof or default thereunder. Upon receipt of an executed Alternative Notice of Intention to Deliver, the Exchange will return to the clearing members all margin monies held for the account of each with respect to the contracts involved.
The crux of this trade was the TAS order type. It seems like these guys arbed the liquidity difference beyond their wildest dreams... But now they're probably spooked about it because it sounds borderline manipulation. Order types are constantly getting traders or exchanges in trouble. If you know about the less popular ones you always stand to beat out your competitors who dont. TAS reminds me of D-quotes on NYSE.
It isn't an order type. In many institutional markets, trades are settled at a price that isn't known when the trade is booked. This happens in rates (LIBOR rigging was an example, it happens elsewhere), it happens in forex (the daily fix, masses of shenanigans there). You also find it in derivative markets (equity options on expiry dates) or, indeed, in any situation where certain dates matter (fund manager with a b…
https://www.investopedia.com/articles/forex/031714/how-forex...