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OOO

2.81%

$19.36 betashares crude oil index etf-currency hedged (synthetic)

WARNING: Read me before buying OOO, page-453

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DavoMagic

17,180 Posts.

56

23/04/20

10:19

Post #: 44206234
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Originally posted by DavoMagic: ↑

The oil future WTI appears to be going up on pure oil trader derivative speculation.

This is the problem I see with this market.

The true physical spot at the moment is a lot lower.m It has to be because demand has no place to put it and demand has to be better later because they have more time to store.

So for the physical no reason for WTI to be going up at all. It is going up on pure oil trader derivative speculation which must reverse later when they have to sell at end of month and they struggle to find people to buy because there is no storage.

This would never happen if the speculators bought buy contracts that had no period through the derivative option and therefore did not affect the oil price until when they wished to transfer it into the physical market.

This is the trouble. The monthly futures oil markets is designed for actual physical buying and selling not derivative speculation. There is no need for derivative speculation to enter monthly future markets when it could participate in a future market without a period as previously suggested and not affect the oil price because its just speculation.

The only reason speculation is being slotted into the monthly future markets appears to be to exploit both retail traders and shooters vis market manipulation.as well as possible other participants by creating false price market signals via the derivative market separate to the true physical market. In theory why is USO bothering about rolling over future month contracts when it could have entered a different non restrictive future period without a month???

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Remember the retail trader cannot buy physical through the ETF whether OOO or USO, nor does it attempt to, so why does the fund attempt to offlay contracts through the physical each month by rolling over?

The funds have no reason to enter the future markets because traders are looking to trade on price not the physical market really

Last edited by DavoMagic: 23/04/20

OOO Price at posting: $19.36 Sentiment: None Disclosure: Not Held
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WARNING: Read me before buying OOO, page-453

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