You seriously don't know what a stockout is?
OK, let me make this easier for you. The curve is in backwardation. Spot prices are 55, 30 day forwards are at 53. Walk me through the arbitrage. Come on dude, this is finance 101.
Crude is screwed, man.
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You seriously don't know what a stockout is?
OK, let me make this easier for you. The curve is in backwardation. Spot prices are 55, 30 day forwards are at 53. Walk me through the arbitrage. Come on dude, this is finance 101.
I never hinted at that. You again inject falsehood. Stock-outs are utterly irrelevant to your claim on forward curve predictive values and your claim violates any no-arbitrage requirements. Stick to the topic Mr.
But to entertain your brain a bit: There is no arbitrage if that is what the forward price is. If someone makes a two-way at a different level then you can trade against it, but the forward price itself is set in order to avoid arbitrage. Which part are you still not getting? When you run a model that comes up with a different forward price then that simply means that you are making different assumptions about storage cost and/or financing than the rest of the market.
But to entertain your brain a bit: There is no arbitrage if that is what the forward price is. If someone makes a two-way at a different level then you can trade against it, but the forward price itself is set in order to avoid arbitrage. Which part are you still not getting? When you run a model that comes up with a different forward price then that simply means that you are making different assumptions about storage cost and/or financing than the rest of the market.
Are you serious. First you lecture me on no arbitrage. You then admit it fails under certain market conditions. You ranted for pages and pages on the forward pricing and how you know all about it then you say you can't do it. I'm done here. And btw sir, Vitol has NEVER lost money in the history of their company. Not in a single year, not in a single qtr in 40 years. Good day sir.
a) I never admitted that [it] "fails under certain market conditions"? Now you make up lies. Quote please. I think you need to read more carefully.
b) I never even showed the slightest interest to entertain your little quiz questions.
c) This is the third time you claim you are "done here". When WILL you be done?
d) I can name you over a thousand companies that never lost money in any year during their existence. So what?
b) I never even showed the slightest interest to entertain your little quiz questions.
c) This is the third time you claim you are "done here". When WILL you be done?
d) I can name you over a thousand companies that never lost money in any year during their existence. So what?
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https://www.bloomberg.com/news/feat...trader-vitol-makes-billions-in-volatile-times
"Over half a century (the company will celebrate its 50th anniversary in August) Vitol has never suffered an annual loss. Profits surged from just $22.9 million in 1995 to a record $2.28 billion in 2009, according to documents reviewed by Bloomberg. At its peak, Vitol’s return on equity, a measure of profitability compared with the money that partners have invested, was a geyserlike 56 percent. Even Wall Street pales in comparison; Goldman Sachs’s best ROE since going public in 1999 is 31 percent. “Vitol has established itself as the ultimate energy trader,” says Jean-François Lambert, who as former global head of commodity and structured trade finance at HSBC dealt extensively with the company."
"Over half a century (the company will celebrate its 50th anniversary in August) Vitol has never suffered an annual loss. Profits surged from just $22.9 million in 1995 to a record $2.28 billion in 2009, according to documents reviewed by Bloomberg. At its peak, Vitol’s return on equity, a measure of profitability compared with the money that partners have invested, was a geyserlike 56 percent. Even Wall Street pales in comparison; Goldman Sachs’s best ROE since going public in 1999 is 31 percent. “Vitol has established itself as the ultimate energy trader,” says Jean-François Lambert, who as former global head of commodity and structured trade finance at HSBC dealt extensively with the company."
Thanks to both of you for the reading suggestions.
Germany is doing a great job, Trump is too conservative, probably solar energy in the U.S. won't develop as we really need it.
I respectfully disagree with the greatest enthusiasm on your points about the forward curves in the commodities. All commodities. I've made a living for many years trading the forward curves in commodities - exchange futures, OTC Bilateral Physical, OTC Financial Swaps. The forward curve is all about SUPPLY and NOT particularly basis components as you imply, and that is exactly why the forward curve is dominated by institutional order flows >>>>> and its THOSE guys you want to be trading with, and NOT the spec traders in the prompt months. You'll live longer and make more $$$$.
I've been doing this since the 1990's, and I can say with great authority that the commodity forward curves mean EVERYTHING to the professional trader - serious big dick swinging specs and both consumption and production commercial desks I speak of.
If you're in this space for size and you don't know the role of Glencore, Bunge, Louis Dreyfus, Cargill, Koch, ADM etc. etc. then you know dick. Nothing. You're trading in the dark. I'll put it to you this way - if you had a trading relationship with OTC brokers like Amerex, Prebon Yamane, Tradition, etc. etc. you'd sure as hell know. The futures are the dog's tail - OTC is the MF'ing DOG.