Comment by scurvy
5 years ago
Did you read the part where I wrote, "there's no place to put the stuff?"
I also specifically said "front month contract".
June oil is barely over $20 today and will probably drop under that mark by week's end.
5 years ago
Did you read the part where I wrote, "there's no place to put the stuff?"
I also specifically said "front month contract".
June oil is barely over $20 today and will probably drop under that mark by week's end.
The point of futures is that I could sell my oil _today_ to be delivered in June for $20. Any change in June oil prices from that point onwards doesn’t matter once I’ve sold the contract.
If the price collapses for June you buy a june pick up contract, trade it for your June delivery contract, and sell a July delivery contract. So long as you have the oil and can deliver you can make money on it until prices return to where it doesn't work out at which time you deliver your oil.