Dad
01-03-2008, 11:27 AM
Yesterday's single small oil deal buying the minimum NYMEX order for oil at $100/barrel by a BROKERAGE OWNER was purposely made by him at a loss. Richard Arens broke the psychological price ceiling to push the oil market to rise above $100/barrel for real, which it did today. I'll bet Mr. Arens has other oil investments that he's NOT losing money on.
Brokers don't lose money on purpose for nothing...
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By Javier Blas for London Financial Times
Published: January 2 2008 21:47 | Last updated: January 3 2008 01:11
With a single small deal, an independent trader on Wednesday secured his place in market history by pushing oil prices briefly to the unprecedented level of $100 a barrel.
Some observers questioned the validity of the price mark when it emerged that the peak was the result of a trader – one of the “locals” who trade on their own money – buying from a colleague just 1,000 barrels of crude, the minimum allowed, industry insiders said. The deal on the floor of the New York Mercantile Exchange was at a hefty premium to prevailing prices.
Insiders named the trader as Richard Arens, who runs a brokerage called ABS. He was not available for comment. Analysts said he may have been testing the ceiling of the crude price, but the premium he paid surprised the market.
Before the $100-a-barrel trade, oil prices on Globex were at $99.53 a barrel. Immediately after the trade, prices went down to about $99.40, suggesting a trading loss of $600 for Mr Arens.
Stephen Schork, a former Nymex floor trader and editor of the oil-market Schork Report, commented: “A local trader just spent about $600 in a trading loss to buy the right to tell his grandchildren he was the one who did it. Probably he is framing right now the print reflecting the trade.”
The transaction was not shown at first on the electronic Globex system, which carries the bulk of crude oil trading, leaving the market unsure about the price level. But Nymex said: “It is considered a valid trade.”
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And whats up with the Globex system not showing ALL TRADES transacted on the NYMEX exchange? What a bunch of B.S.
Brokers don't lose money on purpose for nothing...
********************************
By Javier Blas for London Financial Times
Published: January 2 2008 21:47 | Last updated: January 3 2008 01:11
With a single small deal, an independent trader on Wednesday secured his place in market history by pushing oil prices briefly to the unprecedented level of $100 a barrel.
Some observers questioned the validity of the price mark when it emerged that the peak was the result of a trader – one of the “locals” who trade on their own money – buying from a colleague just 1,000 barrels of crude, the minimum allowed, industry insiders said. The deal on the floor of the New York Mercantile Exchange was at a hefty premium to prevailing prices.
Insiders named the trader as Richard Arens, who runs a brokerage called ABS. He was not available for comment. Analysts said he may have been testing the ceiling of the crude price, but the premium he paid surprised the market.
Before the $100-a-barrel trade, oil prices on Globex were at $99.53 a barrel. Immediately after the trade, prices went down to about $99.40, suggesting a trading loss of $600 for Mr Arens.
Stephen Schork, a former Nymex floor trader and editor of the oil-market Schork Report, commented: “A local trader just spent about $600 in a trading loss to buy the right to tell his grandchildren he was the one who did it. Probably he is framing right now the print reflecting the trade.”
The transaction was not shown at first on the electronic Globex system, which carries the bulk of crude oil trading, leaving the market unsure about the price level. But Nymex said: “It is considered a valid trade.”
*********
And whats up with the Globex system not showing ALL TRADES transacted on the NYMEX exchange? What a bunch of B.S.