4 ms·
There are lots of ways that stock in food and energy companies could go down while prices go up. A drought or pipeline disruption come to mind.
by anon7725 2y ago
There are lots of ways that stock in food and energy companies could go down while prices go up. A drought or pipeline disruption come to mind.
- yowlingcat 2y agoAbsolutely. And I think the same is true for the commodities market correlates there; if memory serves correctly, crude commodity futures went negative for a break period during the supply chain volatility spike during the beginning of the pandemic.
- mlrtime 2y agoYou are correct, for oil contracts near expiration. All oil containers (in certain areas) were full, so anyone taking delivery would need a place to store the oil. The market needed a way to transfer this risk (risk of delivery) so prices went negative meaning you were paid to find a place for the oil. It's really neat actually and shows how almost all of the financial system is really a big "risk transfer" mechanism.