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The ACD Method
- Thread starter sbrowne126
- Start date
http://www.reuters.com/article/2014/09/09/us-oil-hedgefunds-hall-idUSKBN0H423H20140909
A few months old but still interesting. FWIW, Andrew Hall is one of the biggest players in the oil space.
A few months old but still interesting. FWIW, Andrew Hall is one of the biggest players in the oil space.
How is Hall buying long dated WTI oil?
Is it via calendars or what?
2019 dated CL outrights have little volume
OTC?
Is it via calendars or what?
2019 dated CL outrights have little volume
OTC?
How is Hall buying long dated WTI oil?
Is it via calendars or what?
2019 dated CL outrights have little volume
OTC?
He could be trading forwards with specific producers that are financing future production. One of the advantages in long dated futures markets, especially energy is that they tend to trade at a deep discount. This is where producers hedge future production. By locking in a future price (even a bad price) it allows them to borrow to pay for the production since they already have a fixed sales price. This is really fundamental the economic value that futures markets provide. And for a astute player like Hall, he can express his views on the market at good prices. This also works in nat gas.
Crude...natty....rbob....heating oil....silver....copper.....Yen.....Gold.....
That's a lot of vol there...
That's a lot of vol there...
Interesting article, though outdated on current pricing obviously. If it's correct, crude has more downside coming.
http://business.financialpost.com/2014/11/05/oil-prices-saudis-shale/?__lsa=b24c-f4cb#__federated=1
http://business.financialpost.com/2014/11/05/oil-prices-saudis-shale/?__lsa=b24c-f4cb#__federated=1
http://media.futuresmag.com/futuresmag/historical/Issues/2005/12/Documents/FM0604-FI-Terranova.pdf
Thanks to Hoop for sending this to me. It's old but Joe has some great insights here and most of his talking points I live by and repeated often on here. Enjoy guys!
Thanks to Hoop for sending this to me. It's old but Joe has some great insights here and most of his talking points I live by and repeated often on here. Enjoy guys!
Interesting article, though outdated on current pricing obviously. If it's correct, crude has more downside coming.
http://business.financialpost.com/2014/11/05/oil-prices-saudis-shale/?__lsa=b24c-f4cb#__federated=1
I think prices can go a lot lower especially if we start to see economic growth curtail. Basically, what we have here is a great example of modern game theory. The players are fighting for monopoly power. Each firm's decision is predicated on what they think their opponent is going to do. The optimal strategy of course is to cooperate. This was the genesis behind the creation of OPEC to begin with. Through collusion, one can control supply and by proxy control market prices. Right now, price is determined by the market as oil is no longer a monopoly but a competitive marketplace. So the decision is, do you hurt yourself over the short term to squeeze out all the marginal suppliers, re-gain the monopoly and then take prices back up where you now control the market? It appears as though the strategy chosen by all here is not to cooperate and instead drive price down to zero. Long term implications? Oil will go parabolic in the not too distant future. It's really no different then hyper-inflation. You need hyper-deflation first to get to hyperinflation.