Questions tagged [futures]

For questions relating to futures contracts.

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1answer
65 views

Who are allowed to take short positions in WTI CRUDE Oil futures?

Can any individual like me take short position?
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1answer
112 views

Who creates oil futures?

Who creates futures such as CL.AUG20 (August WTI Crude Oil contract) sold on NYMEX which can be bought via eToro? I understand that when a company wants to go public, they sell these stocks on an ...
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1answer
24 views

What is the meaning of asset underlying the futures contract?

I am reading a book of J.C Hull on Future and option where he explained the basis risk which is S2 + F1 - F2 or F1 + b2 I got this concept but reading further he expand above expression as F1 + (S*2 - ...
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1answer
33 views

How is money calculated when buying BRR future on CME through IB?

I tried on simulated account to buy 1 BRR future (multiplier = 5). Total amount with commissions expected was 49280 Initial margin expected was +31047 Maintenance margin expected was +24837 ...
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3answers
65 views

Does Futures markets influence price?

I have a few questions: For example I am going LONG on ES1! with leverage. I don't acquire an actual S&P 500 fund but as how futures work I just have a contract that I believe its price is going ...
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2answers
45 views

Stock splits and futures/options contracts

Let's say a company's stock is going to get split into two. All derivative contracts, such as options and futures, will be adjusted accordingly, of course. When are the futures and options contracts ...
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1answer
64 views

What exactly is the spot market?

I understand for commodities such as crude oil, there is NYMEX exchange where futures contract are listed and traded. Where exactly do I find the spot market? How does it work? Where is the price ...
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1answer
36 views

Understanding futures contracts points

Currently, the SPX is 3044.3 and the ESM2020 (JUN 2020) is 3043.50. Can someone explain to me how the E-mini quote work? I am not asking about the profit/loss calculations but how do I assess this ...
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0answers
44 views

If I invest in futures in my IRA, what am I going to see happen?

I have a Roth IRA with TD Ameritrade. I've been thinking about investing in stock futures in order to get higher expected returns (at the expense of very high risk, of course). I'm wondering what, ...
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1answer
122 views

What is SPX500USD?

I am wondering what is SPX500USD? https://www.tradingview.com/symbols/OANDA-SPX500USD/?route_range=full This has a different value than the SPX. I am thinking this is some sort of futures? Thank ...
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0answers
16 views

Entering or exiting a position on “sell bid or sell ask”

I just have a question I’m curious about Lets say you are long ABC and you want to get out and you decide you want to sell on the bid Lets say the bid price is trading at 10 When hitting that “sell ...
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0answers
22 views

What kind of orders can be placed in a limit up or limit down?

Although the market is halted, can traders still enter in a market order or a limit order? Page 4 says it is a quote only state. Does this mean traders can enter in limit orders that are open and not ...
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1answer
347 views

Impacts on RBC banning USO explaining to a futures beginner

As you might be aware of this recent news: "RBC Capital Markets has informed United States Commodity Funds, the operator of the USO ETF, that they may no longer hold positions in or buy oil futures ...
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1answer
49 views

Futures expiration date vs settlement date terminology confusion

As titled, are futures settled on the expiration dates, meaning either physically settled or cash settled on the same dates? My confusion is if I purchased a June crude oil futures now, when is the ...
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0answers
14 views

Futures Commission Merchant Maximum Commission

Is there a maximum round turn commission FCM's can charge their customers? I looked here: NFA Assessment Fee and here for a fee break down. There is no maximum round trip fee for commission such as $...
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1answer
67 views

Futures contract [beginner quick help]

I understand the basics of how the futures work but couldn't understand based on a practical sense as a speculator. "A futures contract is a legal agreement to buy or sell a particular commodity ...
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0answers
23 views

Result of a failed delivery of futures contract [duplicate]

I am curious about, what if the seller couldn't deliver the physical product of a futures contract? Will there be any penalty or something like that?
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1answer
44 views

What does it exactly mean by saying “buy/sell a futures contract”?

If I buy a crude oil futures contract at $20/barrel and sell it later at $10/barrel, I seem to buy/sell two different contracts. First, the entities of the contract change from me and exchange to ...
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2answers
144 views

What is the real cost for storing a barrel of crude oil at present?

The recent negative price of WTI crude oil futures contract indicates the receipt/storage of a barrel of crude oil can cost more than $37, which is unbelievable. Does anybody know the real cost at ...
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1answer
51 views

If I buy a crude oil futures contract at CME, must I sell the contract before the last trading day?

Does CME have different contracts for different traders, i.e., some traders must close their positions before the last trading day of their futures contracts while others can hold their position to ...
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1answer
55 views

What is the price of commodity at delivery day for a futures contract?

If I hold a futures contract till the delivery day, what price should I pay for the commodity delivered to me, the price of the futures contract when I bought it, the price of the last transaction at ...
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1answer
34 views

Why does rollover helps to cut cost of current contract?

Offsetting involves closing a position. Rollover involves closing a position and opening a new one. Is offsetting a part of rollover? If not, what is the strategic difference between these two? ...
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0answers
96 views

Trading micro e-minis futures from Canada with limited net worth (with NinjaTrader platform)

I am a Canadian. I wish to get into the Micro E-mini Equity Futures market. I wish to use the Ninja Trader platform as I find it powerful, and I can code strategies using my favourite programming ...
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1answer
63 views

What are the actual mechanics of an oil future trade, especially at the moment when the price goes negative?

I hope this is on-topic. It's not directly about personal finance, but it's not an academic economics question either. It is about what happens behind the scenes. The question is motivated by the ...
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1answer
47 views

Will Bloomberg Composite Crude Oil Subindex rise when Crude oil prices rise?

Since the oil prices have plunged recently, I want to capitalize on this opportunity by investing in WisdomTree WTI Crude Oil ETC which tracks Bloomberg Composite Crude Oil Subindex. Question: 1) ...
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3answers
8k views

What happens if I do not honor a futures contract?

I have little knowledge about futures contracts. The recent negative price of crude oil spurred my curiosity about this stuff. I read this post about buying/selling futures contracts. According to ...
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0answers
35 views

Differences in loss between offsetting and rollover futures? [duplicate]

For example, you are long/buy a crude oil futures contract in March at the spot price of $100 which expires in June. Then the day before they expire, the spot price of the June contract is $70. If ...
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2answers
82 views

What happen to the Oil Contracts which are sold when there are only a few buyers?

If you don't want physical delivery, then you have to sell your futures contract before it expires. And what happened on April 20th is that oil prices went negative since there are lots of sellers and ...
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1answer
59 views

What is the loss difference between offseting and rollover the contracts?

If you are long a futures contract that comes near to expire, you have two options: Offset the position or rollover the contract You have to take delivery of the underlying commodity For example, ...
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2answers
75 views

Crude Oil Futures Settlement

I am a bit confused about how futures contracts are settled. I know that usually contracts are either cash-settled or physically settled. For CME WTI crude oil futures contracts, how does settlement ...
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1answer
29 views

How come rollover the futures maintain the risk position?

I am still wondering about the risk difference between offsetting a position and rollover. As I know, both offsetting and rollover are involved in selling the initial futures contract ( which gives ...
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2answers
109 views

Why oil traders selling oil on the day before expire date but not the other days earlier than that?

As you know, the oil price was negative on April 20th 2020 due to the future contracts expiration date. I am wondering why traders had to wait until 1 day before expiration to close the position (sell ...
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1answer
60 views

Calculating the price of oil

So I've seen a lot of questions about the oil crisis, but what I still didn't figure out is how the broker (providing you the ability to buy commodities) calculates their prices in respect to ...
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3answers
306 views

Total beginner starting to invest in oil

I'm a total beginner in investing (I know very, very, very, very little). I did some investing in crypto but that's it. I want to start learning to invest and I want to start with investing in oil. I ...
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1answer
180 views

Had any commodity futures prices ever been negative before 2020?

It was recently all over the news (and this site) that the price of May 2020 oil futures was briefly negative. By my understanding, the immediate cause was that the oil was delivered through a ...
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0answers
48 views

What does it mean when Oil Futures go negative? [duplicate]

The following is a picture of the Oil Futures in Think-or-Swim (by TD Ameritrade). The symbol is /CLK20 in this application but other applications or websites may use a different notation. On 04/20/...
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1answer
387 views

Could an individual make money off of oil futures? [duplicate]

There was another post about this but oil is going for -32 dollars a barrel. What if I acquired A million barrels of oil. I’d be sitting on 32 million with which I could theoretically use to buy an ...
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1answer
87 views

Are there places to long/short OIL contract futures, for the average person, until the closing time?

I am wondering if the average Joe could have made a profit yesterday, on the CLK2020CRUDE OIL FUTURES (MAY 2020) contract, that ended having negative prices. I've seen that there are CFD products ...
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10answers
18k views

Could I make money off of the negative oil price?

I saw the price of oil did something at about 1 PM Eastern time that is really bizarre: it went negative. This means that you get paid to take oil off the field. But, the oil price is negative now, ...
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2answers
119 views

Oil futures price convergence

Looking at oil prices now: May: $20 June: $26 Spot: $20 According to the price convergence theory, the price of the May futures contract closely matches the spot price. This makes sense. However, ...
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2answers
66 views

Making money on a Bond Rally

I mainly trade equities and derivatives, however, I'm listening to more and more intelligent economists and fund managers who are talking about how low rates and treasuries will be leading to a major ...
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2answers
63 views

Can someone explain me the mechanism behind rolling future contracts and contango influence of my investment when buying a commodity ETF (like USO)?

Why is the return of an oil fund lower than the return on oil price? The contracts have to roll over at the end of the near expiration date. If it won't roll over then the contract oil barrels will be ...
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2answers
270 views

Why does the futures market use stupendously high leverage?

From Investopedia: The futures markets typically use high leverage. Futures contracts may only require a deposit of a fraction of the contract amount with a broker. I know how margin trading works,...
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1answer
63 views

Variance of WTI Texas crude price Mar 20 2020

Friday last ie on Mar 20, 2020, the prices of WTI crude were reported as $19.84 (approximately) - this was the closing price on Markets.businessinsider.com and Market watch, sites which both provide ...
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1answer
75 views

Eurodollar Futures - How to interpret the price, and correlation between, EUR and USD currency?

I have a problem understanding EURDollar Futures. I mainly do trading in currencies. What impact does a rise in EURDOLLAR futures have on the dollar or EUR? Is there a correlation? I have read here ...
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1answer
85 views

To buy S&P minis or SPY (or VOO)

Let's say I'm going to buy in the market to hold. What are the pros and cons of buying MES futures instead of SPY ETFs for exposure to S&P500? From a high level I know that MES is $5 per point ...
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1answer
36 views

What could cause options premiums and futures market to point in opposite speculative directions?

Its 8am EST here in the US. At around 530am the premium per share for a put option of SPY expiring on 2/28 was $0.13. Between 645 and 730 the premium rose to $0.22. This would suggest that a fall in ...
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1answer
149 views

By what mechanism can I short a commodity without the use of futures of that commodity?

I live in the US and I work for a company that is heavily related to a particular commodity X. As such, when I began working for them, I signed a document stating that I would not purchase stock/ETFs/...
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1answer
47 views

Initial price of a forward contract

Given that the payoff of a forward contract with strike K and maturity T has the payoff ST - K, how do I prove that the initial price of this contract is S0 - K*B0, where B0 is the price of a bond ...
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1answer
42 views

Futures - Eurodollars basic questions

I've been learning about trading futures markets and had a few basic questions. The Dec-20 Eurodollar trades at 98.59 (i.e. by Dec-20 investors are expecting 3 month LIBOR rates to be 1.41%). Now ...

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