Page 1 of 1
Holy Sh*t! Oil Under $2 A Barrel!
Posted: Mon Apr 20, 2020 12:56 pm
by Smith1776
Title says it all. The collapse of aggregate demand has led to a surplus glut of oil all around the world. Storage capacity has reached its limit in many parts both world. There's more oil around than we know what to do with. That coupled with continually falling demand and ECON 101 kicks in: a massive dive in prices.
- oil.png (154.74 KiB) Viewed 3974 times
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Mon Apr 20, 2020 1:06 pm
by Smith1776
IT JUST HIT ONE CENT A BARREL HOLY SHIT.
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Mon Apr 20, 2020 1:27 pm
by Smith1776
It's negative now.
Guys, the price is negative. Like... negative.
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Mon Apr 20, 2020 4:24 pm
by Dieter
Yeah, this is wild. Huge.
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Mon Apr 20, 2020 4:26 pm
by dualstow
So does one get cash when they fill up at the gas station now?
On a serious note, I hope the airlines can afford to stock up. Sometimes they have done that in the past and it worked out well for them, and for their stock price.
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Mon Apr 20, 2020 7:31 pm
by ochotona
This is a sign the real economy is in trouble. Stonks are not a good indicator.
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Mon Apr 20, 2020 8:37 pm
by dualstow
I don’t have any stonks.
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Tue Apr 21, 2020 9:42 am
by shekels
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Tue Apr 21, 2020 9:43 pm
by shekels
Ouch. Leverage works both ways.
As a result, the Company has recognized an aggregate provisionary loss of approximately $88 million.
https://www.businesswire.com/news/home/ ... -Contracts
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Wed Apr 22, 2020 4:22 am
by Vil
Shorting WTI is forbidden today in Europe, no quotes.. Come on, it has to be a free market
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Wed Apr 22, 2020 7:09 am
by Mark Leavy
The Black Scholes options pricing formula doesn't work in the real world.
CME has returned to Bachelier's method from the early 1900's. Bachelier's idea that option pricing should be based on Brownian motion was ridiculed at the time.
FROM: CME Clearing
ADVISORY #: 20-171
SUBJECT: Switch to Bachelier Options Pricing Model
DATE: April 21 , 2020
Pursuant to Clearing Advisory 20-152 that was published on April 8 , the clearing house will
switch the options pricing and valuation model to Bachelier to accommodate negative prices in the underlying futures and allow for listing of option contracts with negative strikes for the set of products specified below.
Louis Bachelier
Bachelier's Doctoral thesis, which introduced for the first time a mathematical model of Brownian motion and its use for valuing stock options, is historically the first paper to use advanced mathematics in the study of finance. Thus, Bachelier is considered as the forefather of mathematical finance and a pioneer in the study of stochastic processes.
Hopefully, this little incident will finally put a stake in the Black-Scholes model, which has been transparently bull-shit from day one.
Re: Holy Sh*t! Oil Under $2 A Barrel!
Posted: Wed Apr 22, 2020 8:24 am
by Libertarian666
Mark Leavy wrote: ↑Wed Apr 22, 2020 7:09 am
The Black Scholes options pricing formula doesn't work in the real world.
CME has returned to Bachelier's method from the early 1900's. Bachelier's idea that option pricing should be based on Brownian motion was ridiculed at the time.
FROM: CME Clearing
ADVISORY #: 20-171
SUBJECT: Switch to Bachelier Options Pricing Model
DATE: April 21 , 2020
Pursuant to Clearing Advisory 20-152 that was published on April 8 , the clearing house will
switch the options pricing and valuation model to Bachelier to accommodate negative prices in the underlying futures and allow for listing of option contracts with negative strikes for the set of products specified below.
Louis Bachelier
Bachelier's Doctoral thesis, which introduced for the first time a mathematical model of Brownian motion and its use for valuing stock options, is historically the first paper to use advanced mathematics in the study of finance. Thus, Bachelier is considered as the forefather of mathematical finance and a pioneer in the study of stochastic processes.
Hopefully, this little incident will finally put a stake in the Black-Scholes model, which has been transparently bull-shit from day one.
Yes, that would be nice. I never thought that model made any sense.