Investors to sue Moscow Exchange over stoppage of WTI oil trading - page 3

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dr.mr.mom:

Since 1 May.

Friends, please explain this whole situation to me from the point of view of STACKAN. And so thought and so, I do not understand. I could understand if the price would move simply "by the indicative", but it seems it is FORTS also by the book, i.e. by counter orders. How did it end up below 0? What kind of negative bids were knocked into by negative offers. It's even a little chilly from lack of understanding)

And explain to me at the same time, I can't understand. How positions could have been closed if the exchange was closed. I understand that if the futures are bought, the futures have to be sold to someone on the market in order for the client to close. But how was it sold if the market was closed and to whom? I am not an expert in futures and I am obviously misunderstanding something, I want to understand better how it works.
 
Maxim Romanov:
And explain to me at the same time, I can't understand it. How positions could have been closed if the exchange was closed. I understand that if the futures are bought, the futures have to be sold to someone by the market in order for the client to close. But how was it sold if the market was closed and to whom? I am not an expert in futures and I am obviously misunderstanding something, I want to understand better how it works.

Brokers simply ask customers to fully close their existing contract positions in the portfolio before the end of trading on the same day. Thereafter, all unexecuted orders are cancelled and open positions are enforced according to risk management rules. The legal basis for all these measures is the changes to the exchange's operating rules that have been urgently adopted by the Derivatives Market Committee.

 
dr.mr.mom:

Since 1 May.

Friends, please explain this whole situation to me from the point of view of STACKAN. And so thought and so, I do not understand. I could understand if the price would move simply "by the indicative", but it seems it is FORTS also by the book, i.e. by counter orders. How did it end up below 0? What kind of negative bids were knocked into by negative offers. It's even a little chilly from lack of understanding)

No one can explain how the price moved in the negative range if traders could not trade in it and close positions. One is left to fantasise.
 
Реter Konow:
No one can explain how the price moved in the minus range if traders could not trade in it and close positions. We are left to fantasise.

Fantasising on real money somehow is DIRTY). I'll wait/search for comments. What a lot of traders have met up with Kolya again(((.

 
dr.mr.mom:

Since 1 May.

Friends, please explain this whole situation to me from the point of view of STACKAN. And so thought and so, I do not understand. I could understand if the price would move simply "by the indicative", but it seems it is FORTS also by the book, i.e. by counter orders. How did it end up below 0? What kind of negative bids were knocked into by negative offers. It's even a little chilly from lack of understanding)

It's got nothing to do with our bet. It is a settlement futures for US oil, which is accordingly linked to its price on the US exchange. Therefore, whatever happens on our exchange, the contract will be executed at the US price at the time of expiration. And that is where it was negative.
 
A100:

This was known in advance, hence the usual market risk.

So the stock exchange regulations state that quotations are limited to zero?
 
Maxim Romanov:
And explain to me at the same time, I can't understand it. How the positions could have been closed if the exchange was closed. I understand that if the futures are bought, then in order for the client to close, the futures have to be sold to someone on the market. But how was it sold if the market was closed and to whom? I am not an expert in futures and I am obviously misunderstanding something, I want to understand better how it works.

It's as simple as a 2x2. It's a futures market... each contract has a seller and a buyer. As long as the futures are traded, you can buy and sell; when they are not traded, you cannot. When the X-hour comes, all other participants settle accounts at CME spot price (which formally has nothing to do with futures price, futures trading etc.). - has nothing to do with the price of the futures).

 
Alexey Navoykov:
So the exchange rules say that the quotes are limited to zero?

It doesn't really matter - there were no negative prices - the bidding was stopped in the positive price area. And if there is no bidding, you cannot buy and sell even if someone suddenly puts in a negative bid

Imagine that the stock exchange had a blackout for two days? Would it change anything? No - the most important thing is that the exchange of an asset is working, and the last price before expiration is the settlement.

 
A100:

It doesn't really matter - there were no negative prices - the bidding was stopped in the positive price area. And if there is no bidding, you cannot buy and sell even if someone suddenly puts in a negative bid

It does not matter, because if the exchange stops trading, it means that it is responsible to clients, who use its instruments. Futures is a pure exchange-traded product, it does not exist outside the exchange, as far as I know. Unlike a stock, for example, which can also be sold outside the exchange. Therefore, the client, when buying an exchange instrument, expects the exchange to allow him to sell it at any time, according to the rules of its operation.
 
Alexey Navoykov:

The exchange is responsible for the settlement, not for the opportunity to buy/sell itself. If you buy/sell and are unable (for whatever reason) to reverse the transaction by the deadline, the exchange will settle the buyer/seller on time at the price of the underlying asset. The initial buy/sell of the futures is a self-sufficient transaction.

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