|
JD mark me for 2810 please. . . . I've been really curious about oil lately, and here's an interesting thing. You know USO? It's probably fair to say that only retail is going to be buying USO, because if you're an market participant actually hedging or speculating you're going to cut out the middle man and just trade the futures yourself. USO has gotten enormous lately. At year-end 2019 there were about 92 million shares outstanding with a NAV of $1.2 billion. As of Friday 4/17 there are ten times that many shares outstanding, over a billion, with a NAV of around $4.3 billion. USO currently owns 146,000 June contracts, versus an open interest of 538,000 contracts. USO holds 27% of all June WTI futures. That seems kinda absurd, doesn't it? That's 146,000 contracts that will absolutely positively not take delivery and have to be rolled in a few weeks (at large losses if current pricing holds). I'm trying to find historical data for how much of the front month USO has owned in the past, because I suspect when it's this high it does not bode well for oil. Will do more research and update later if I trade on it. But if anyone is intimately familiar with USO let me know if anything I said above seems odd or wrong.
|
#
?
Apr 19, 2020 18:51
|
|
|
|
| # ? May 21, 2024 03:17 |
|
|
I think one concept that isn't being discussed is how the effect of coronavirus on the economy will be determined by the response to the virus, rather than the virus itself. Deaths, testing, cases, and all these other isolated statistics that you guys are going over will no doubt impact that response, but it won't fully drive it. At some point there will be fatigue to the response, and the response will evolve into a focus of bringing things back to near normal. That being said, I think the likely end game for all of this is that we all come to terms with the fact that coronavirus is not going away, people are going to die from it, and there is not much that can be done. This is in contrast to the current sentiment where there is this surreal belief that death from disease is some sort of new thing, and that it needs to be beaten at any cost. The timing for this will likely be when things start to reopen and cases increase directly proportion to it. Politicians will look like idiots for not having an effective end game planned out after putting everyone through hell (regardless of how much is inevitably blamed on someone else), and public sentiment will move from fear to acceptance. Mark me for 2850 for next week.
|
|
#
?
Apr 19, 2020 18:58
|
|
|
Cheesemaster200 posted:I think one concept that isn't being discussed is how the effect of coronavirus on the economy will be determined by the response to the virus, rather than the virus itself. Deaths, testing, cases, and all these other isolated statistics that you guys are going over will no doubt impact that response, but it won't fully drive it. At some point there will be fatigue to the response, and the response will evolve into a focus of bringing things back to near normal. My thought on this is that a lot of the current policy and sentiment is driven by the potential liability and legal action that will undoubtedly arise from this situation. We live in the age where it's other peoples responsibility to ensure my safety, as such we are pushing policy that protects each and every person regardless of consequence. How this evolves will be very interesting to follow, there will be significant legal precedent set in cases such as "business X got me sick" or "person Y didnt' follow the rules and got person Z sick who then infected their elderly parent who died". It's obviously a much bigger and MUCH more complicated issue than this, but I see a lot "fear of lawsuit" in actions that are being taken during this crisis. Will that stay the same as we try to counteract the massive economic problems this policy has created? Will lawsuits like the ones I mentioned above ever gain traction? Lots of questions like that will drive how the recovery goes.
|
|
#
?
Apr 19, 2020 20:13
|
|
|
https://twitter.com/Reuters/status/1251824300744728577
|
|
#
?
Apr 19, 2020 20:30
|
|
|
Lmao "Neiman Marcus’ borrowings total about $4.8 billion, according to credit ratings firm Standard & Poor’s. Some of this debt is the legacy of its $6 billion leveraged buyout in 2013 by its owners, private equity firm Ares Management Corp and Canada Pension Plan Investment Board (CPPIB)." Ares, a vampiric firm like Bain Capital, did a leveraged buyout on Nieman Marcus, then saddled Nieman Marcus with all the debt that Ares incurred to conduct the takeover. Ares then pockets a ton of money from this. This is why NM is going under. It's vulture capitalism at its worst. Leveraged buyout are what puts a lot of companies out of business, who would otherwise have stayed solvent. It should be illegal.
|
|
#
?
Apr 19, 2020 20:46
|
|
|
Freezer posted:Honestly I'm a bit surprised by how low the average and median guesses are. yeah... part of me thinks uh oh that means market going to rip up like crazy lol
|
|
#
?
Apr 19, 2020 20:50
|
|
|
current, 2 hours before futures open
|
|
#
?
Apr 19, 2020 21:02
|
|
|
Agronox posted:JD mark me for 2810 please. duplicate #, fyi....
|
|
#
?
Apr 19, 2020 21:02
|
|
|
2900
|
|
#
?
Apr 19, 2020 21:11
|
|
|
2890
|
|
#
?
Apr 19, 2020 21:16
|
|
|
2929
|
|
#
?
Apr 19, 2020 21:18
|
|
|
Can I change mine to 2769?
|
|
#
?
Apr 19, 2020 21:24
|
|
|
It'll go up to 3000 because we live in the upside down
|
|
#
?
Apr 19, 2020 21:28
|
|
|
Idk seems like the US is itching to make numbers go up. https://twitter.com/jburnmurdoch/status/1251965076610916353?s=19
|
|
#
?
Apr 19, 2020 21:54
|
|
|
2820
|
|
#
?
Apr 19, 2020 21:54
|
|
|
SirPablo posted:Idk seems like the US is itching to make numbers go up. Too bad we have this to look forward to! 
|
|
#
?
Apr 19, 2020 22:33
|
|
|
Bored As gently caress posted:Lmao This is a dumb take. Lenders were ok with the risks vs interest rate, the owners of Nieman Marcus got bought out at a price they thought was fair. Stupid banks and private lenders are the ones who get hosed by this and they knew the risks they were taking by funding it. It is fine these things are tried and ok when they fail. It is healthy. The should be illegal thing is when private equity buys the insurance on a loan and forces a bankruptcy for a set up missed payment to collect on the insurance which didn't happen in this case.
|
|
#
?
Apr 19, 2020 22:57
|
|
|
Oh, the rare double freedom curve.
|
|
#
?
Apr 19, 2020 22:57
|
|
|
Private equity bankruptcies have a bit of an adverse selection issues too, companies don’t get bought out when they are on top of their game, so you have weaker companies being bought out vs their peers that stay in family ownership or publicly traded.
|
|
#
?
Apr 19, 2020 23:11
|
|
|
2969 because freedom is free, roni is baked in and AMERICA'S OPEN FOR BUSINESS BABY.
|
|
#
?
Apr 19, 2020 23:17
|
|
|
Foma posted:This is a dumb take. Lenders were ok with the risks vs interest rate, the owners of Nieman Marcus got bought out at a price they thought was fair. Stupid banks and private lenders are the ones who get hosed by this and they knew the risks they were taking by funding it. It is fine these things are tried and ok when they fail. It is healthy. The should be illegal thing is when private equity buys the insurance on a loan and forces a bankruptcy for a set up missed payment to collect on the insurance which didn't happen in this case. Why is it okay for a private equity firm to do a leveraged buyout with money that THEY borrow, and then saddle the company they bought, with the debt that THEY borrrowed?
|
|
#
?
Apr 19, 2020 23:37
|
|
|
Bored As gently caress posted:Why is it okay for a private equity firm to do a leveraged buyout with money that THEY borrow, and then saddle the company they bought, with the debt that THEY borrrowed? capitalism baby
|
|
#
?
Apr 19, 2020 23:38
|
|
|
Bored As gently caress posted:Why is it okay for a private equity firm to do a leveraged buyout with money that THEY borrow, and then saddle the company they bought, with the debt that THEY borrrowed? ...because it's now THEIR company? I mean I'm no great fan of LBOs but everybody is walking in with eyes open. The lenders are fully aware of what's going on.
|
|
#
?
Apr 19, 2020 23:41
|
|
|
VOTES ARE IN GOOD LUCK EVERYBODY
|
|
#
?
Apr 19, 2020 23:44
|
|
|
2696.9 edit: gently caress, too late
|
|
#
?
Apr 19, 2020 23:48
|
|
|
Bored As gently caress posted:Why is it okay for a private equity firm to do a leveraged buyout with money that THEY borrow, and then saddle the company they bought, with the debt that THEY borrrowed? Why can a person saddle their VACATION expenses into A HOUSE loan when they borrowed through HELOC loans.
|
|
#
?
Apr 19, 2020 23:55
|
|
|
Agronox posted:...because it's now THEIR company? Yeah, okay. But what happens when that company gets run into the ground, or gutted chopped up and sold off? Or what happens if it simply cannot service the debt it is saddled with? It goes bankrupt, and every single employee except for the C suite assholes suffers and loses their jobs. Maybe they're not bad overall, but these two articles show why I hate them. https://www.vox.com/the-goods/2020/1/6/21024740/private-equity-taylor-swift-toys-r-us-elizabeth-warren https://www.google.com/amp/s/www.ro...ism-241519/amp/
|
|
#
?
Apr 20, 2020 00:08
|
|
|
https://twitter.com/JavierBlas/status/1251999766168457218 So does this mean there will be a small artificial pop in USO when the weighting changes to the June contract?
|
|
#
?
Apr 20, 2020 00:22
|
|
|
saintonan posted:So does this mean there will be a small artificial pop in USO when the weighting changes to the June contract? Nope. USO already rolled into the June (and July) contract. But it wouldn't "pop" regardless, because they pay to switch over when the market's in contango. (And to be maybe more clear, USO doesn't own any of the contract mentioned in the tweet above.)
|
|
#
?
Apr 20, 2020 00:31
|
|
|
Agronox posted:Nope. USO already rolled into the June (and July) contract. But it wouldn't "pop" regardless, because they pay to switch over when the market's in contango. Ok, so nothing that happens to the May contract now affects USO? quote:(And to be maybe more clear, USO doesn't own any of the contract mentioned in the tweet above.) So this tweet is incorrect? https://twitter.com/OilSheppard/status/1251185844007862273
|
|
#
?
Apr 20, 2020 00:37
|
|
|
I made a joke answer but I think it’ll be closer to the actual number than the average here
|
|
#
?
Apr 20, 2020 00:43
|
|
|
saintonan posted:Ok, so nothing that happens to the May contract now affects USO? Correct. Maybe this will help, it's a very shittily annotated WTI futures curve for the next few months:  quote:So this tweet is incorrect? No, that's correct: it's saying that USO has bought a ton of June WTI. The one that's trading for ~$17.30 is the May contract.
|
|
#
?
Apr 20, 2020 00:44
|
|
|
Agronox posted:No, that's correct: it's saying that USO has bought a ton of June WTI. Oh, right, I was just comparing that to the last line of the first tweet: "The WTI June contract trades at $24.5 a barrel." It's that contract (and apparently some amount of July) that USO has some absurdly high percentage of all open contracts on.
|
|
#
?
Apr 20, 2020 00:48
|
|
|
saintonan posted:Oh, right, I was just comparing that to the last line of the first tweet: "The WTI June contract trades at $24.5 a barrel." It's that contract (and apparently some amount of July) that USO has some absurdly high percentage of all open contracts on. Yeah. And as an update to that, investors poured another $400 million into USO on Friday alone. I think I want to be on the other side of them but I'm not sure the best way to trade it. You could do a calendar spread on the futures (sell June, buy July) and hope that it blows out like May-June did; this would also give you something of a hedge if oil ran up in the meantime. You could just short USO, as it's easy to borrow. Or you could buy puts on it, but now you're paying for time decay instead of collecting it. Tricky thing.
|
|
#
?
Apr 20, 2020 00:59
|
|
|
Has there ever been a circumstance before that a commodity ETF has had such high AUM that it could actually affect the spot price of the commodity? Rolling over that many contracts has got to move that market, even if just a little.
|
|
#
?
Apr 20, 2020 01:10
|
|
|
Cheesemaster200 posted:I think one concept that isn't being discussed is how the effect of coronavirus on the economy will be determined by the response to the virus, rather than the virus itself. Deaths, testing, cases, and all these other isolated statistics that you guys are going over will no doubt impact that response, but it won't fully drive it. At some point there will be fatigue to the response, and the response will evolve into a focus of bringing things back to near normal. Shappa posted:My thought on this is that a lot of the current policy and sentiment is driven by the potential liability and legal action that will undoubtedly arise from this situation. We live in the age where it's other peoples responsibility to ensure my safety, as such we are pushing policy that protects each and every person regardless of consequence. I won't carry water for most of the individuals making calls on policy, but issuing stay at home orders is the correct move here. Not because it's going to 'ensure people's safety for them', but because we are structurally incapable of treating COVID-19 patients who, with treatment, will not die; unless we have lockdowns. There is not an amount of medical treatment capacity to provide the care for preventable deaths to be prevented, without spreading out how many people are infected over a larger window of time. If you don't like it, the way to "keep the economy open" is to invest in better hospital care and equipment availability so that we can keep farting out stupid movies and sports in the face of a global pandemic. But that's a decision you have to make multiple years out ahead of the pandemic, so, shutdowns we have. People will demand they be undone. And then, later, people will demand they be reinstated.
|
|
#
?
Apr 20, 2020 01:14
|
|
|
saintonan posted:Has there ever been a circumstance before that a commodity ETF has had such high AUM that it could actually affect the spot price of the commodity? Rolling over that many contracts has got to move that market, even if just a little. I remember hearing back in 2008 or 2009 it was a pretty popular trade for commodity desks to front-run USO, because back then they told you exactly what date they would roll the contracts (now it's a range of 3-4 days). So definitely back then. I have to imagine it pops up in other places too but I don't know for sure. I usually put commodities into the "here be dragons, do not touch" bucket along with forex. If anyone ITT knows please tell us!
|
|
#
?
Apr 20, 2020 01:16
|
|
|
lol I'm going to have to update the best bottom chart again front month crude is below $16 now
|
|
#
?
Apr 20, 2020 02:15
|
|
|
Agronox posted:...because it's now THEIR company? Who generally loans this kind of money for LBOs? Pensioners aren’t fully aware of what’s going on if their pension managers are getting kickbacks, bribes, or pressured into lending out pensions funds for bad investments.
|
|
#
?
Apr 20, 2020 02:22
|
|
|
|
| # ? May 21, 2024 03:17 |
|
|
Agronox posted:lol I'm going to have to update the best bottom chart again 
|
|
#
?
Apr 20, 2020 02:25
|
|