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This is right up there with the futures trader who accidentally ordered a barge full of coal delivered to his manhattan office.

speedylight 1y ago
I would love a link to that article lol
- beaviskhan 1y ago
  This is where I read it: https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery
  - emchammer 1y ago
    That writeup seems exaggerated. When I read the story, it was a newbie at a Bloomberg Terminal who pressed the wrong button.
    - rkagerer 1y ago
      Have you got a link to a different account? This one describes it as an XML parsing error (expecting true/false instead of 0/1) combined with some hubris on the part of the the trading exec ("what part of ‘execute my f*ing trade’ don’t you understand!")
      - rkagerer 1y ago
        Ps. I agree it feels fake/eggagerated, I just wondered if it stemmed from a divergent, true incident of some sort.
    - Animats 1y ago
      Right. That one is probably fake. It's not at all uncommon to trade a tanker load of oil, and this may result in the tanker being re-directed mid-trip, or being anchored somewhere for a while. Those are normal shipping events. (Yes, there are parking spaces for oil tankers. Here are the ones in the San Francisco Bay.[1]) I have read of an oil trader who bought a trainload of railroad tank cars of oil as a similar deal. That was a bigger hassle, because finding and paying for a storage track to park the tank cars became his problem. There is a market in railroad siding for storage, but there are not that many available spaces. Most of them are in Outer Nowhere, someplace where there used to be something that needed track but no longer does.[2] Managing this tied up a lot of high-priced broker time. Supposedly worked out OK, but nobody wanted to do it again. [1] https://www.sfmx.org/wp-content/uploads/2017/01/Anchorage-9-Berth-Layout-Information-Sheet.pdf https://www.sfmx.org/wp-content/uploads/2017/01/Anchorage-9-... [2] https://sidings.ca/collections/sidings https://sidings.ca/collections/sidings
  - sgarland 1y ago
    This is like a friendlier version of r/wsb’s stories.
colechristensen 1y ago
Yes many futures are not "cash settled" but settled in the actual commodity. This is why in rare occasions the price of a thing goes negative because trading in that thing you are contractually obligated to take delivery and people trying to unload that obligation sometimes can't find buyers until they are paid to take delivery. It happens when nobody really wants to buy a thing and there is no capacity left to store or ship. When you buy a futures contract and you don't want delivery you have to sell it to close your position, and rarely you have to give people large sums of money so you can close.
- tialaramex 1y ago
  In 2020 some Oil futures were negative at close, which has one obvious effect (if you're stuck holding the bag you're paying to store all this oil despite it being, at least temporarily, worthless) but also messes up the ETFs. Suppose my actual oil futures go from $800k to $900k, the ideal ETF is trying to ensure that $800k also turns into $900k just as if its investors were in actual oil futures. But these aren't futures and don't result in delivery - so critically when real oil futures blow up and that $900k turns into -$1M because the global economy had a heart attack the ETF cannot be worth -$1M as it's just paper and I don't have to pay you one cent. For the ETFs this means a negative exposure for the operator - they're eating unlimited downside but can't pass that on to their customers, and for a blip like 2020 that's survivable (if you're well capitalised) but longer term it would be fatal.
  - chii 1y ago
    i figured these ETF providers have to have sufficient capital in reserve to allow for it perhaps? I mean, how does it work if they defaulted on those options by not being able to take delivery? Who pays?
    - tialaramex 1y ago
      Some ETFs can't go negative because they're moving say, stock in oil refiners, oil research, etc. and they've got a model to try to follow the motion of oil futures based on investments in those stocks. So for them this sort of chaos is not good of course, but they don't have scary red numbers everywhere and people who might jump out of a window. In some cases there is basically a bucket shop (hopefully not literally, those are illegal) and so you're betting against somebody with lots of capital, but in that scenario it can definitely go very bad and it's important to read your fine print. I believe in 2020 some funds pointed out that in their fine print it said they get to choose not to follow a month's oil delivery if they need to, so, you expected $15M for the June oil because it went negative as you'd hoped, but too bad we've decided to roll that over to July oil, and that's going to lose you money as you have to wait a month longer and get worse results. That sort of thing is obviously infuriating for an investor, but as with gambling firms who won't pay (and this happens a lot if you win serious money gambling, e.g. Oops, when you gave us $100 we forgot to ask for valid ID, but now that we owe you $150 000 because you got lucky we've remembered - without ID actually the bet was illegal, so here's the $100 back and no hard feelings) they get a reputation for not paying and that does eventually hurt them.
alfiedotwtf 1y ago
As soon as I read this headline, I was hoping someone in the comments was going to link to “Special Delivery”! That one and “Complicator’s Gloves” are probably the most memorable!
kchoudhu 1y ago
As good as the DailyWTF story is, it's not real. Coal is unfortunately cash settled. Even oil, which is physically delivered settles physically in discrete locations. It would be pretty funny if someone delivered tankers full of oil to your office though lol.
gadders 1y ago
Good job it wasn't a power future.

speedylight 1y ago

I would love a link to that article lol

beaviskhan 1y ago
This is where I read it: https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery
- emchammer 1y ago
  That writeup seems exaggerated. When I read the story, it was a newbie at a Bloomberg Terminal who pressed the wrong button.
  - rkagerer 1y ago
    Have you got a link to a different account? This one describes it as an XML parsing error (expecting true/false instead of 0/1) combined with some hubris on the part of the the trading exec ("what part of ‘execute my f*ing trade’ don’t you understand!")
    - rkagerer 1y ago
      Ps. I agree it feels fake/eggagerated, I just wondered if it stemmed from a divergent, true incident of some sort.
  - Animats 1y ago
    Right. That one is probably fake. It's not at all uncommon to trade a tanker load of oil, and this may result in the tanker being re-directed mid-trip, or being anchored somewhere for a while. Those are normal shipping events. (Yes, there are parking spaces for oil tankers. Here are the ones in the San Francisco Bay.[1]) I have read of an oil trader who bought a trainload of railroad tank cars of oil as a similar deal. That was a bigger hassle, because finding and paying for a storage track to park the tank cars became his problem. There is a market in railroad siding for storage, but there are not that many available spaces. Most of them are in Outer Nowhere, someplace where there used to be something that needed track but no longer does.[2] Managing this tied up a lot of high-priced broker time. Supposedly worked out OK, but nobody wanted to do it again. [1] https://www.sfmx.org/wp-content/uploads/2017/01/Anchorage-9-Berth-Layout-Information-Sheet.pdf https://www.sfmx.org/wp-content/uploads/2017/01/Anchorage-9-... [2] https://sidings.ca/collections/sidings https://sidings.ca/collections/sidings
- sgarland 1y ago
  This is like a friendlier version of r/wsb’s stories.

colechristensen 1y ago

Yes many futures are not "cash settled" but settled in the actual commodity. This is why in rare occasions the price of a thing goes negative because trading in that thing you are contractually obligated to take delivery and people trying to unload that obligation sometimes can't find buyers until they are paid to take delivery. It happens when nobody really wants to buy a thing and there is no capacity left to store or ship. When you buy a futures contract and you don't want delivery you have to sell it to close your position, and rarely you have to give people large sums of money so you can close.

tialaramex 1y ago
In 2020 some Oil futures were negative at close, which has one obvious effect (if you're stuck holding the bag you're paying to store all this oil despite it being, at least temporarily, worthless) but also messes up the ETFs. Suppose my actual oil futures go from $800k to $900k, the ideal ETF is trying to ensure that $800k also turns into $900k just as if its investors were in actual oil futures. But these aren't futures and don't result in delivery - so critically when real oil futures blow up and that $900k turns into -$1M because the global economy had a heart attack the ETF cannot be worth -$1M as it's just paper and I don't have to pay you one cent. For the ETFs this means a negative exposure for the operator - they're eating unlimited downside but can't pass that on to their customers, and for a blip like 2020 that's survivable (if you're well capitalised) but longer term it would be fatal.
- chii 1y ago
  i figured these ETF providers have to have sufficient capital in reserve to allow for it perhaps? I mean, how does it work if they defaulted on those options by not being able to take delivery? Who pays?
  - tialaramex 1y ago
    Some ETFs can't go negative because they're moving say, stock in oil refiners, oil research, etc. and they've got a model to try to follow the motion of oil futures based on investments in those stocks. So for them this sort of chaos is not good of course, but they don't have scary red numbers everywhere and people who might jump out of a window. In some cases there is basically a bucket shop (hopefully not literally, those are illegal) and so you're betting against somebody with lots of capital, but in that scenario it can definitely go very bad and it's important to read your fine print. I believe in 2020 some funds pointed out that in their fine print it said they get to choose not to follow a month's oil delivery if they need to, so, you expected $15M for the June oil because it went negative as you'd hoped, but too bad we've decided to roll that over to July oil, and that's going to lose you money as you have to wait a month longer and get worse results. That sort of thing is obviously infuriating for an investor, but as with gambling firms who won't pay (and this happens a lot if you win serious money gambling, e.g. Oops, when you gave us $100 we forgot to ask for valid ID, but now that we owe you $150 000 because you got lucky we've remembered - without ID actually the bet was illegal, so here's the $100 back and no hard feelings) they get a reputation for not paying and that does eventually hurt them.

alfiedotwtf 1y ago

As soon as I read this headline, I was hoping someone in the comments was going to link to “Special Delivery”! That one and “Complicator’s Gloves” are probably the most memorable!

kchoudhu 1y ago

As good as the DailyWTF story is, it's not real. Coal is unfortunately cash settled. Even oil, which is physically delivered settles physically in discrete locations. It would be pretty funny if someone delivered tankers full of oil to your office though lol.

gadders 1y ago

Good job it wasn't a power future.