4 ms·

What are you going to do with the oil after one month? No one needs oil right now so if you take physical delivery it’s going to be sitting there for longer th

• greenshackle2 7y ago
  > selling the June contract at the same time They would not be the one holding that particular bag.
  • tempsy 7y ago
    if only arbitrage was that easy...
    • agseward 7y ago
      That's literally what futures contracts are for.
      • greenshackle2 7y ago
        In a discussion about negative future prices no less. If buyers could refuse physical delivery, that's what they would be doing now, not selling at negative prices.
    • greenshackle2 7y ago
      You still have to store the oil for a month. Which is expensive right now. Which is precisely why the May future is so cheap in the first place. I'm just rebutting that you will be stuck with the oil after June. Since they specifically said, they would sell a June contract immediately.
      • option_greek 7y ago
        It just implies that any profit made by arbitraging June contract with May by taking physical delivery doesn't cover the storage costs (which is hard to believe at $22 difference but that's what market seems to indicate).
  • deleted 7y ago
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