How to calculate historical liquidity premium crude oil deal - Commodities Futures Trading | futures io social day trading
futures io futures trading


How to calculate historical liquidity premium crude oil deal
Updated: Views / Replies:612 / 2
Created: by Sulagna Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

How to calculate historical liquidity premium crude oil deal

  #1 (permalink)
Trading Apprentice
Mumbai, India
 
Futures Experience: None
Platform: NA
Favorite Futures: Oil, commodities
 
Posts: 1 since Oct 2014
Thanks: 0 given, 0 received

How to calculate historical liquidity premium crude oil deal

For an assignment, I need to estimate on the basis of market data, what would've been the liquidity premium on a certain Dubai crude oil forward deal as of 30th Jul, 2014.
Deal details: 12 mn barrels for one year calendar spread.
Also, there's a flexibility to adjust the volume every month as per that month's actual exposure. (i.e., while the deal talks about a notional vol of 12 mn bbl, the actual vol can be 11 mn, or 13 mn ... ). For this flexibility a 5-6 cents/bbl premium has been charged. I also need to validate on the basis of market data if this premium is correct.
Any help would be greatly appreciated.

Reply With Quote
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Market Wizard
Houston, TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 2,123 since Dec 2013
Thanks: 1,749 given, 3,358 received
Forum Reputation: Legendary

Answer
This post has been selected as an answer to the original posters question Answer



Sulagna View Post
Deal details: 12 mn barrels for one year calendar spread.

What does this actually mean? What is the pricing mechanism? What is the delivery mechanism.

Sulagna View Post
Also, there's a flexibility to adjust the volume every month as per that month's actual exposure. (i.e., while the deal talks about a notional vol of 12 mn bbl, the actual vol can be 11 mn, or 13 mn ... ). For this flexibility a 5-6 cents/bbl premium has been charged. I also need to validate on the basis of market data if this premium is correct.
Any help would be greatly appreciated.

It will depend upon how the crude is priced. In its simplest form this could be priced as an 11 kkb forward with a 2 kkb option but I suspect that pricing and logistic constraints mean it's not that simple.

Reply With Quote

Reply



futures io > > > > How to calculate historical liquidity premium crude oil deal

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Crude Oil trading JDNeeman Trading Journals 526 November 24th, 2016 08:12 PM
Here's why crude oil could get even cheaper kbit News and Current Events 0 August 5th, 2014 12:17 AM
Scalping Crude Oil ElSenorMosquito Trading Journals 19 September 22nd, 2013 10:26 AM
What's next for Crude Oil? Big Mike Commodities Futures Trading 16 October 6th, 2012 11:16 PM
BruteForce-Crude Oil Zoethecus Trading Journals 32 July 14th, 2010 01:16 PM


All times are GMT -4. The time now is 01:40 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-16 in 0.08 seconds with 23 queries on phoenix via your IP 23.22.136.56