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It's because there's contango in oil futures right now. The spread between front month futures and november is something along the lines of $30 a barrel. So y
by steveplace 18y ago
It's because there's contango in oil futures right now.
The spread between front month futures and november is something along the lines of $30 a barrel.
So you buy a front month future, take delivery, simmer, and sell a november future. If the profit from the futures arb is worth more than the opportunity cost (tanker rental), then it's a good play.
- gravitycop 18y ago$30 a gallon. Barrel?
- steveplace 18y agoSorry, just got out of my time machine.
- eru 18y agoWelcome to Germany.
- gravitycop 18y agothere's contaigo in oil futures http://en.wikipedia.org/wiki/Contango http://en.wikipedia.org/wiki/Contango
- steveplace 18y agoWhen you type faster than you think or speak, problems like this tend to arise.