A London-based trading house bought 250,000 barrels of oil during the historic plunge below $0 and l

[systematictrader]

Profit is the result of volume * profitmargin.

Probably the deal of 250,000 barrels had 100 times or more profits per barrel than the usual trading. So the profits can be equal to 25 million barrels in normal trading. Never calculate only based on volume, profitmargin can have more importance than volume.

But who is to say they got out at the exact bottom ?

 

[virtusa]

But who is to say they got out at the exact bottom ?

I just want to say that volume does not say anything about profits.
All depends of the profitmargin. If during the year the profit is average $3 a barrel, and they could buy now at $0, at a selling price of $30 they make now $30 profit a barrel instead of the usual $3. So profits are 10 times higher. Or in other words: in normal times they needs to sell 10 times more to make the same profit as they made on this $0 deal.

Example:
If I trade 10 ES, notional value around $1.5million at 3,000, 1 point move can make me $500.
My neighbor who is producing icecream sells also for $1.5million (iccream, no ES futures) with a 30% profit margin. He probably makes much more profit than me as he should only have a net profitmargin of 0.04% to beat my profit on the same transaction amount.

There are each year companies that sell for billions and still end up with a loss. Why? Because they have a bad or no profitmargin at all.

 

[kreskos]

I think that in such companies everything is always thought out and the result is corny cannot bring large losses to the company. And the example above is very correct.

 

[virtusa]

Stop believing the cushing full story...

Exactly.

I think the real situation of the cushing has a military importance. So the real situation will never be disclosed. Even if it would be empty, they would still say it is full.
It is a poker game.

 

[newwurldmn]

Exactly.

I think the real situation of the cushing has a military importance. So the real situation will never be disclosed. Even if it would be empty, they would still say it is full.
It is a poker game.

Its manipulated by brokers who are stealing their commodity customers’ strategies. This extra capacity ensures they can trade.

 

[systematictrader]

I just want to say that volume does not say anything about profits.
All depends of the profitmargin. If during the year the profit is average $3 a barrel, and they could buy now at $0, at a selling price of $30 they make now $30 profit a barrel instead of the usual $3. So profits are 10 times higher. Or in other words: in normal times they needs to sell 10 times more to make the same profit as they made on this $0 deal.

Example:
If I trade 10 ES, notional value around $1.5million at 3,000, 1 point move can make me $500.
My neighbor who is producing icecream sells also for $1.5million (iccream, no ES futures) with a 30% profit margin. He probably makes much more profit than me as he should only have a net profitmargin of 0.04% to beat my profit on the same transaction amount.

There are each year companies that sell for billions and still end up with a loss. Why? Because they have a bad or no profitmargin at all.

That makes sense