Heck I was just getting over the fact it dropped below $10. Then below $5. Thought ok well it's at $0, lo and behold I saw -$40.
The June WTI contract now refuses to go below $21.00. An eerie calm has come over this market. I don't think this is going to last.
From CME: If WTI Crude Oil futures prices settle, in any month, to a price between $8.00/bbl and $11.00/bbl, CME Clearing MAY switch its pricing and margining options models from the existing models to the Bachelier model, currently utilized in numerous spread options products where negative underlying prices and strike levels are a regular occurrence. If any WTI Crude Oil futures prices settle, in any month, to a level below $8.00/bbl, CME Clearing WILL move to the Bachelier model for all WTI Crude oil options contracts as well as all related crude oil options contracts effective the following trade date. CME Clearing will send out an advisory notice with one day notice before any implementation occurs with all appropriate details. https://www.cmegroup.com/content/dam/cmegroup/notices/clearing/2020/04/Chadv20-152.pdf.?mod=article_inline
You and me both. Going into single digits didn't surprise me at this point but watching it blowout towards -$40...
I have a nasty feeling it's gonna follow suit and drop like a brick. We'll see how it trades tomorrow.