I was a bit sceptical at your RJO mate's speculation that mom-n-pops were left holding the bag on some of the long May CL trades that imploded yesterday. As you suggested above, I assumed these were mostly physical market participants that had to deal with the realities of May contracts converging to spot as we approached expiry with sto…
I was a bit sceptical at your RJO mate's speculation that mom-n-pops were left holding the bag on some of the long May CL trades that imploded yesterday. As you suggested above, I assumed these were mostly physical market participants that had to deal with the realities of May contracts converging to spot as we approached expiry with storage full. I thought this because surely no brokerage firm would be stupid enough to let retail speculator hold position going into expiration week - regardless of the Exchange's decision. Mine for example forces the contract role the week prior or liquidates the position as it does not allow physical settlement. Alas, turns out Interactive Brokers was left holding the bag to tune of $90MM. Estimate is that other retail brokers may be stuck with 500MM losses. What were they thinking?!
I saw that too! That’s a big number that IB got tagged with. I still think it’s a prop group or some other pseudo-sophisticated group, but alex was probably more correct than I thought.
I was a bit sceptical at your RJO mate's speculation that mom-n-pops were left holding the bag on some of the long May CL trades that imploded yesterday. As you suggested above, I assumed these were mostly physical market participants that had to deal with the realities of May contracts converging to spot as we approached expiry with storage full. I thought this because surely no brokerage firm would be stupid enough to let retail speculator hold position going into expiration week - regardless of the Exchange's decision. Mine for example forces the contract role the week prior or liquidates the position as it does not allow physical settlement. Alas, turns out Interactive Brokers was left holding the bag to tune of $90MM. Estimate is that other retail brokers may be stuck with 500MM losses. What were they thinking?!
I saw that too! That’s a big number that IB got tagged with. I still think it’s a prop group or some other pseudo-sophisticated group, but alex was probably more correct than I thought.