Hi Angelo, Thanks that's quite pertinent. As I understand it, according to IB policy, the May 2020 positions were subject to liquidation starting from April 16 if they had not been rolled over by the customer but it doesn't clearly state whether you could initiate positions after that date. The Cutoff time being April 20 19:30 (post fixing), I am not sure whether it goes against their rules. However, I don't understand what represents the Long Future Liquidation date (April 17). https://www.interactivebrokers.com/en/index.php?f=deliveryExerciseActions&p=physical If someone has a different/clearer understanding of that table, please let me now.
Does anyone know if May crude ended trading on 4/20 by the cutoff time, what accounted for the volume that was recorded on 4/21, when it traded all the way back up to $13? Were they big institutions or banks? If so it seems like they had the most incentive for what happened because they were still allowed to hold the contracts on 4/21 and was able to close out before expiration. By the way below is a screenshot from Thinkorswim showing substantial volume for the contract on the 4/21 nearing expiration.
But the whole discussion is about ICE futures that are financially settled. Maybe it has something to do with footnote 1 (i.e. what you show not applicable for margin accounts).
I also don't understand. It was widely discussed that the negative day was the last trading day, but the next day it still seemed to be trading (below and above 0 from what I remembered). Maybe an oil expert can chime in...
LTD is the 3rd business day before the 25th calendar day of the month preceding the contract month. If the 25th falls on a non-business day, trading stops on the 4th business day before the 25th calendar day of the month preceding the contract month. That was April 21.
Yeah, but the actual question is if it did trade after the -$37.63 settlement. Coincidentally I just read this: Oil futures have remained volatile throughout the week. The May contract bounced back above zero on Tuesday before it expired, while the June contract fell by more than 40%. On Wednesday, June futures surged by 19%. https://www.cnbc.com/2020/04/22/cme...nd-its-no-secret-futures-can-go-negative.html
Have Investors Been Misled By The Oil Price Crash? https://oilprice.com/Latest-Energy-...stors-Been-Misled-By-The-Oil-Price-Crash.html Negative Oil Has Hamm’s Continental Invoking ‘Act of God’ Clause https://www.bloomberg.com/news/arti...rer-invokes-force-majeure-citing-negative-oil
Appears it did. The -$37.63 was settlement on 4/20, the retail firms stated that since they do not support delivery you couldn't trade it on the last day which was 4/21. Essentially it seems like this rule allowed extreme price movements to happen on Monday, and eliminated retail from being able to get out of their negative losses on Tuesday.
Let's just not have this intellectual exercise on negative prices any longer? Oy! Negative prices of energy are just bad juju for the world. Be glad for now that it happened for one day only. Like a ping. One ping only please.