Free-Falling: U.S. Oil Drops Below $2 Per Barrel As Demand Disappears

Discussion in 'Commodity Futures' started by kmiklas, Apr 20, 2020.

  1. "Interactive Brokers noted that, as has been widely reported, the energy markets yesterday exhibited extraordinary price activity in the New York Mercantile Exchange West Texas Intermediate Crude Oil contract. The price of the May 2020 contract dropped to an unprecedented negative price of $37.63. This price was the basis for determining the settlement price for cash-settled contracts traded on the CME Globex and also on a separate, expiring cash-settled futures contract listed on the Intercontinental Exchange Europe. Several Interactive Brokers LLC customers held long positions in these CME and ICE Europe contracts, and as a result they incurred losses in excess of the equity in their accounts. IBLLC has fulfilled the firm's required variation margin settlements with the respective clearinghouses on behalf of its customers. As a result, the Company has recognized an aggregate provisionary loss of approximately $88 million. The Company does not believe that any anticipated losses will have a material effect on its financial condition."

    I understand why IB does not want their customers to take physical delivery. Consequently, I also understand why IB customers' positions must be settled at the end price of USD -37.63 if the customers have not liquidated their position before the end of trading at the last day of trading.

    What I don't understand is why IB customers allegedly should not be able to trade on the last day of trading. What difference does that make?
     
    #41     Apr 22, 2020
  2. RKON

    RKON

    I suffered a large loss in May Crude because I was not able to close my long position at a negative Crude price - maybe a bug in IBs trading system. Charts and bid/ask incl. PL stopped when prices crossed the zero line. This is unacceptable, I'm looking for traders sharing my experience in order to chase Interactive
     
    #42     Apr 22, 2020
  3. Are you normally able to trade crude oil futures up until the close 14:30 on the last trading day at Interactive Brokers?
     
    #43     Apr 22, 2020
  4. RKON

    RKON

    Normally yes - maybe not going forward
     
    #44     Apr 22, 2020
  5. RKON

    RKON

    I'm referring to the mini Crude contract (cash settlement)
     
    #45     Apr 22, 2020
  6. RedDuke

    RedDuke

    Here in US IB does now allow us to trade CL this close to expiration, Friday was cut off, but we flipped our algos on Wednesday.
     
    #46     Apr 22, 2020
  7. does anybody know, what are the penalties for failure to deliver on CL?
     
    #47     May 15, 2020