Can /NG fall below zero like /CL?

schizo said:
No, only CL, RBOB and HO are subject to negative pricing.

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.
  • Similarly, if RBOB Gasoline futures prices settle, in any month, to a price between $0.20/gal and $0.30/gal, CME Clearing MAY switch its pricing and margining options models from the existing models to the Bachelier model. If any RBOB Gasoline futures price settle, in any month, to a level below $0.20/gal, CME Clearing WILL move to the Bachelier model for all RBOB Gasoline options contracts as well as all related gasoline 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.
  • Similarly, if Heating Oil futures prices settle, in any month, to a price between $0.20/gal and $0.30/gal, CME Clearing MAY switch its pricing and margining options models from the existing models to the Bachelier model. If any Heating Oil futures price settle, in any month, to a level below $0.20/gal, CME Clearing WILL move to the Bachelier model for all Heating Oil options contracts as well as all related heating 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/da...g/2020/04/Chadv20-152.pdf.?mod=article_inline
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Interesting thought, can uso go negative in this situation? Since they hold futures ? The fund itself negative sure, but its ticker and symbol and nav/stock price ?
 
systematictrader said:
Based on cme making this effective the next day shouldn't crude have NOT traded negative today monday ? Since it never settled between 8-11 range they wrote
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True (according to my limited comprehension based on what's written). I already smell a scent of lawsuit brewing in the background.
 
systematictrader said:
Interesting thought, can uso go negative in this situation? Since they hold futures ? The fund itself negative sure, but its ticker and symbol and nav/stock price ?
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USO is pegged to the crude oil futures and it trades only the front month. So, as long as the June contract trades above 0, it should be fine. However, should CL go negative like yesterday, hmmmmmmm???? It's hard to say. But I do know if stocks or mutual funds, including ETFs, when they hit ZERO, they're done. Kapoot.
 
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