goose
11:32 Sat Jan 2
Re: Wolves of West Horndon
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Average traded volume is about half a million a day.
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Capitol Man
11:31 Sat Jan 2
Re: Wolves of West Horndon
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It’s the way the index price on the exchange is calculated.
If you have contracts that are written on the settlement price or a basis to the settlement price and as the market comes to a towards a close and you ditch (or in this case pay people to take) sufficient contracts to drive the price significantly lower you are effectively manipulating the settlement price to your own advantage.
In this case because the market was so thin it cost them less to trade to force the price down than they would make from an exceptionally low (negative) April settlement.
I suppose they could argue they didn’t realize the market would be quite that thin and that they are only a small shop and so should never have been the market makers, or that it was simply opportunistic - and the regulators may be ok with it because no consumers got hurt. I dunno.
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goose
11:27 Sat Jan 2
Re: Wolves of West Horndon
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Capitol in its simplest terms it’s basic supply & demand that dictates price plus a bit of human emotion.
Crude oil is hardly a low volume market.
There’s not one bit of evidence to suggest they manipulated the market. All the market indicators suggested a big price drop. Price dropped, people panicked and sold - they took advantage. Well done to them.
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Britannia Pub
11:02 Sat Jan 2
Re: Wolves of West Horndon
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My understanding is (and it might not be right) that they were buying and selling at the same time. They were essentially selling at the prevailing price and buying at the daily closing price. If both transactions were entered into at the same time, albeit with the price of the purchase to be decided at the end of the trading day, how have they manipulated the market? There has to another company or companies on the other side of both transactions for the trade to be registered. If they had shorted the market to force the price lower they would have ended up with an initial margin call on their uncovered position plus or minus the mark to market on any position. From what I’ve read that didn’t happen.
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Capitol Man
10:50 Sat Jan 2
Re: Wolves of West Horndon
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What may well help them was that on the low end no consumers are hurt. If they had goosed the market to record highs everyone would be paying at the pump - as it is no “normal” people got hurt.
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Capitol Man
10:32 Sat Jan 2
Re: Wolves of West Horndon
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goose 8:38 Sat Jan 2
Re: Wolves of West Horndon
Not sure you know how the price is calculated goose. It’s much easier to move an illiquid market than a liquid one.
if in a thin market you are dumping contracts to deliberately push the price lower then regulators could certainly take the view that it amounts to manipulation.
When you get a market dislocation to that extent you are going to trigger an investigation.
The fact it is a small player moving a market to that extent is going to raise even more eyebrows.
The risk of negative pricing based on the lack of available storage
There is the question of whether the courts would agree with them.
They quote about Goldman doing it has an element of truth but there have also been prosecutions for abusing market power. Enron and the California power blackouts of the early 2000s is a prime example.
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yngwies Cat
10:06 Sat Jan 2
Re: Wolves of West Horndon
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Bet they have a shit taste in fashion though.
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goose
8:38 Sat Jan 2
Re: Wolves of West Horndon
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No way can you manipulate the price to such an extent on so little volume.
The signs were there, the price was f/c with the possibility of going negative.
Good on them. If it was a big financial institution no-one would say a word.
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Eerie Descent
8:34 Sat Jan 2
Re: Wolves of West Horndon
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Good luck to them.
No surprise to see the plastic Yank Taff fuming about it, the bitter wastrel.
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Britannia Pub
8:18 Sat Jan 2
Re: Wolves of West Horndon
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The reason the volume was thin is because there were not enough buyers. Speculators rarely, if ever, want to take delivery so they just wanted to get out of their long position irrespective of price. It got that bad they paid someone to take the contracts off of their hands.
Crude oil came under pressure as well but never went negative because the market works differently.
At the end of the day the traders saw what they thought might be an opportunity and took advantage of it. Good luck to them I say.
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Capitol Man
7:36 Sat Jan 2
Re: Wolves of West Horndon
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Look at the transaction volume for the negative prices though - it’s pretty thin. There’s also the possibility that they didn’t act alone. If they survive the rectal exam from the cftc under a new Biden administration they will deserve their pile.
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Britannia Pub
7:00 Sat Jan 2
Re: Wolves of West Horndon
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It’s extremely unlikely that a small trading house can manipulate the oil market.
The exchange actually warned of negative prices so they took a chance and gambled their own money to make a profit. If it Goldman Sachs or Morgan Stanley no one would bat an eyelid. The fact that a small group of Limeys have have had it off using information put in to the public domain by the exchange itself. The Americans don’t like that one bit but they should learn from it and look at the reasons how such a situation could have happened. If anything the exchange should be fined by the regulators for running a disorderly market.
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Capitol Man
5:55 Sat Jan 2
Re: Wolves of West Horndon
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This has got market manipulation written all over it.
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Far Cough
5:51 Sat Jan 2
Re: Wolves of West Horndon
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Talking of Horndon, some cunts trashed a church to have an illegal rave:
Thousands of pounds has been raised to pay for repairs to a 500-year-old church that was "trashed" during an illegal New Year's Eve party.
Hundreds of revellers attended the party at All Saints Church in East Horndon, near Brentwood, after the building was broken into.
Three people were arrested on suspicion of public order and drugs offences.
Volunteer group Friends of All Saints said it was "completely overwhelmed" by peoples' "support and generosity".
https://www.bbc.co.uk/news/uk-england-essex-55514853
Utter cunts
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Iron Duke
12:13 Mon Dec 28
Re: Wolves of West Horndon
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Ha ha.
I’ve seen one mildly negative comment on this thread, and about nine comments complaining how everyone is always negative.
That is the actual reality of social media. Mountains being made out of molehills with the self-righteous brigade putting the world to right.
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,
11:49 Mon Dec 28
Re: Wolves of West Horndon
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These lads are living on their wits, not using anyone else’s money, not rooking company pension funds, not getting government covid favours because of who they know, not buying influence and peerages, not funding politics in any way, not doing a Nick Leeson on an established Bank, and they are contributing loads of tax to the country.
They are also, apart from say their accents, a million miles from the feckless talent free people portrayed as “Essex” on reality tv shows.
And more often than not they support WHU. So let’s hope these chaps in particular accumulate enough money to buy out our present owners.
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Manuel
11:46 Mon Dec 28
Re: Wolves of West Horndon
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alfs barnet 11:25 Mon Dec 28
Yep. That is exactly what this site has always been like. Everyone looking down their noses, nobody has ever done anything wrong, forever putting the world to rights. It's an absolute cuntfest on here.
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mashed in maryland
11:31 Mon Dec 28
Re: Wolves of West Horndon
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alfs barnet 11:25 Mon Dec 28
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alfs barnet
11:25 Mon Dec 28
Re: Wolves of West Horndon
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Gaffer58 3:23 Sun Dec 27
Good luck to them, but really, just by sitting behind a computer and gambling on the price of oil they get rewarded, sorry not a proper job really.
Fucking priceless on here sometimes. Everyone hates BLM because it's "Marxist" and hates city traders because speculating your own money on market trends is "not a proper job ".
The only way to win on here is to sit around, stroking your beer gut, cunting off absolutely everything you see or read about that isn't exactly like you.
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wanstead_hammer
9:42 Mon Dec 28
Re: Wolves of West Horndon
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Briano 3:41
Exactly.
Was up the City donkeys years ago. Had some trader/dealer mates. All east enders. Used to talk in telephone numbers. I think our early betting shop days held em in good stead.
Good luck to this lot. Quality (especially in this day and age).
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smartypants
7:49 Sun Dec 27
Re: Wolves of West Horndon
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Brilliants story and I hope they pull it off, totally wrong if not. I think one hedge fund made about 2 billion doing this off 20 mill investment, it they are a major player. This lot would of been better off not betting so big, more chance of them staying under the radar for say 100 mil
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