106 votes
Accepted

What does it mean for the price of oil to be negative?

These are futures contracts that expire on 4/21, which means that if you hold a futures contract at the end of the trading day tomorrow (April 21st), then you are obligated to "purchase" 1,...
D Stanley's user avatar
  • 133k
88 votes

Could I make money off of the negative oil price?

Sure you can make money from this. Just get paid to take barrels of crude oil from a producer, take them home, and sell them to someone once the price increases. Problem is: Do you know the laws and ...
Nosjack's user avatar
  • 8,495
87 votes

Why not invest in precious metals?

Precious metals have primarily been useful as a stable store of value, not a way to make a profit The best argument in favor of precious metals has generally been that they hold their value against ...
BrianH's user avatar
  • 11.7k
61 votes

What does it mean for the price of oil to be negative?

Russia and Saudi Arabia have been ignoring production limits set by OPEC. At the same time demand for oil has crashed due to the Covid-19 pandemic and associated lockdowns. The result is an enormous ...
Charles E. Grant's user avatar
41 votes

What does it mean for the price of oil to be negative?

What should be taken into account that this isn't some random oil that one could take for a low price and store on a rented tanker or at some random storage. The particular contract that went negative ...
Džuris's user avatar
  • 661
41 votes

What happens if I do not honor a futures contract?

A futures contract is legally enforceable just like any other contract so the entity at the other end of the contract will have every right to sue you, extract fair recourse per the contract, and ...
WittyID's user avatar
  • 2,013
32 votes

Could I make money off of the negative oil price?

The way to make money off of this would be to buy the futures contracts that are negative then hope that it goes back positive (or at least less negative) before they expire tomorrow. There's no ...
D Stanley's user avatar
  • 133k
30 votes

Could I make money off of the negative oil price?

There is nothing really unique to oil here. There are many other things which have a "negative price", and they have it always, not just temporarily like in the case of oil. Waste (especially ...
vsz's user avatar
  • 1,919
20 votes
Accepted

Is it possible to take advantage of the current low market by buying financial instruments connected with oil/natural gas?

As long as I can buy it today and sell it at a date of my choosing Typically investors don't purchase shares representing indefinite ownership of commodities, instead they are traded as futures. Oil ...
base64's user avatar
  • 10.3k
19 votes
Accepted

How to buy commodity on exchange (to use)

The entire point of these exchanges is to deal commodities for delivery and in the past investors and speculators who didn't want delivery got into some trouble when they forgot to sell out of their ...
MD-Tech's user avatar
  • 8,898
18 votes

What happens if I do not honor a futures contract?

The contract specifies the delivery, generally it is for the buyer to arrange for transport to his location. If the buyer doesn't pick up from the location, he is hit with warehouse charges and the ...
Dheer's user avatar
  • 57k
16 votes

What does it mean for the price of oil to be negative?

For the simple answer version to your question - yes, a negative commodity price means the seller is willing to pay someone else to take a contract off their hands. This is a feature of commodities ...
WittyID's user avatar
  • 2,013
15 votes

Could I make money off of the negative oil price?

The price for physical barrels filled with crude oil isn't actually negative right now in most regions of the world. If you need a barrel of oil for your petroleum refinery, then you will at least ...
Philipp's user avatar
  • 23.9k
12 votes

Could an individual make money off of oil futures?

A million barrels of oil would be a high end tanker, and second hand prices seem to be about $60 to $100 million dollars, so there is a bit of a hole in the budget before you start thinking about ...
richardb's user avatar
  • 1,940
11 votes

Is it practical to take actual delivery on a futures contract, and what is the process?

Here's a good link that can answer your question: How to take delivery of a futures contract The relevant part states: Prior to delivery day, they inform customers who have open long positions ...
Daniel Anderson's user avatar
11 votes
Accepted

Why do commodities futures prices have "-" in them

Some futures markets are priced using a fractional pricing rather than decimal pricing. The example you've mentioned, Soybeans, is priced in cents per bushel, and the "tick size" (the minimum ...
Richard at NorgateData's user avatar
10 votes

How to buy commodity on exchange (to use)

You can buy "real" commodity on a commodity exchange. Every exchange has rules for every traded commodity. The rules include also the day of delivery (usually few days, weeks after last trading day) ...
Sport Enthusiast's user avatar
9 votes

Is it practical to take actual delivery on a futures contract, and what is the process?

Not all futures contracts are deliverable. Some futures are specified as cash settlement only. In the case of deliverable contracts, part of the specification of a futures contract will be the ...
not-nick's user avatar
  • 6,410
8 votes
Accepted

Would investing in commodities help me build my home?

I am not aware of Steel being offered as commodity in India on regulated exchange. Even if there is one, generally it would be sheets/rolls. These are not directly fit for use. One would need to ...
Dheer's user avatar
  • 57k
8 votes

Could I make money off of the negative oil price?

Free WTI oil is available if the buyer has oil storage. Quantities available are in increments of 500 barrels. But the sale ends tomorrow. Now stored oil has significant value.
S Spring's user avatar
  • 3,572
8 votes
Accepted

Is Bitcoin taxable?

Often times, people "operating in bitcoin" are criminals. The whole point of Bitcoin is to evade taxes and detection while committing financial crimes. You're describing one of these crimes. ...
littleadv's user avatar
  • 171k
7 votes
Accepted

Why did the price of crude oil drop below zero today?

Can I invest in crude contracts through a traditional brokerage firm? Will I get paid for every share I purchase? That's not how futures work - you are entering into a contract to buy crude at a ...
D Stanley's user avatar
  • 133k
7 votes
Accepted

Why buy consumable commodities?

Why and how would anyone store them for an indefinite period of time? You wouldn't (well, there are some market conditions where you might, but it's not the norm). Commodities themselves are not ...
D Stanley's user avatar
  • 133k
6 votes
Accepted

Why are there futures for some commodities but not others?

Firstly, steel futures trade on the London Metal Exchange, maybe on other exchanges as well. Perhaps your 32 number was limited to one exchange? I've not researched all the exchanges, but I'd wager ...
Hart CO's user avatar
  • 70.3k
6 votes

Why not invest in precious metals?

Gold stocks (and ETFs and mutual funds comprised of gold stocks) are a reflection of the price of gold during that period. There are years when they are the best or near best performers among all ...
Bob Baerker's user avatar
  • 76.1k
6 votes

Could I make money off of the negative oil price?

There are very large companies that do this every day at high volume. Their processes are extremely efficient, and the price of oil will raise or lower to exactly the right price for these very large ...
TTT's user avatar
  • 47.2k
6 votes

How to calculate the price of 1 Kilogram of each traded-commodity?

"wheat $707 for 5000 bushels (27.2 kg for 1) 1 kg = 0.00519 $, but I buy 1 kilogram wheat from local supermarket for one dollar" It seems you have a misunderstanding of what these prices ...
Grade 'Eh' Bacon's user avatar
5 votes
Accepted

What are the ways to invest in cobalt, lithium, and nickel?

The answer is not so clear cut as you may like, but all depends on your aversion to risk and your financial well-being. At both $20,000 and $200,000 you can invest in metals, it just depends on what ...
Michael Hartmann's user avatar
5 votes

Could I make money off of the negative oil price?

The (somewhat) realistic way to make money from this would be to own, or have the ability to construct before the end of May, regulation-compliant oil storage space in Cushing, Oklahoma. Or in places ...
Michael Borgwardt's user avatar
5 votes

Is value investing applicable to precious metals?

Not really, in my opinion. Value investing deals with finding assets that under-priced relative to their expected cash flows PMs generally do not generate cash and their gains typically come from ...
Charles's user avatar
  • 61

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