Is this why oil went up so fast recently?
http://www.investmentrarities.com/07-21-08.html
You have to scrol ldown to the bottom to get the message.
The issue is that the group that monitors oil futures trading just found that 1 trader was controlling 10% of the entire futures market. This analysis confirms a rumor that i had read where a hedge fund had taken a massive short position in oil and, caught by th eprie rise, had to take an equal long position. Unfortunately, they had to keep adding and adding because the short position kept collapsing.
How that affected the market: someone had to buy a lot of oil future contracts, an din a hurry. WIthoutthis demand, oil futures will come down.
"There was an extraordinary development in the Commitment of Traders Report (COT) for this week. The CFTC issued a special announcement concerning the energy markets. Do to recent pressure, principally by lawmakers, on the CFTC to do something about oil prices, the Commission took a closer look at large traders in the energy market. You can read the special announcement for yourself -
http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm
What you won’t read in the announcement is the real story. That you can only get from studying the different tables provided. Please allow me to summarize what those tables reveal. As a result of the closer scrutiny, the CFTC suddenly "discovered" that a very large trader in crude oil needed to be reclassified from the commercial category to the non-commercial category because the position that this trader held did not represent a bona fide hedge and was, therefore, a speculative position.
What was shocking about this position is its size. This one trader held a spread position of 147.000 contracts in NYMEX crude oil futures and a spread position of 326,000 contracts in futures and options combined, a position of more than 10% of both the entire futures market and futures and options combined. While this percentage of concentration does not come close to the concentrations in silver or gold, it was still largely unknown that one trader held such a large position in crude oil, even if it was a spread position (being long and short different contract months simultaneously.
Of course, the CFTC did not identify this trader by name, as that is contrary to current law (why, I am not sure), but the Commission clearly revealed the trader by size. To give you some perspective of the size of this trader’s futures only position, in the non-commercial spread category to which the position was reclassified, this single trader holds a position more than 90 times as large as the average trader in this category (147,000 contracts vs. an average spread position of 1,630 contracts). How could such a dominant position not control spread price changes?
You have to scrol ldown to the bottom to get the message.
The issue is that the group that monitors oil futures trading just found that 1 trader was controlling 10% of the entire futures market. This analysis confirms a rumor that i had read where a hedge fund had taken a massive short position in oil and, caught by th eprie rise, had to take an equal long position. Unfortunately, they had to keep adding and adding because the short position kept collapsing.
How that affected the market: someone had to buy a lot of oil future contracts, an din a hurry. WIthoutthis demand, oil futures will come down.
"There was an extraordinary development in the Commitment of Traders Report (COT) for this week. The CFTC issued a special announcement concerning the energy markets. Do to recent pressure, principally by lawmakers, on the CFTC to do something about oil prices, the Commission took a closer look at large traders in the energy market. You can read the special announcement for yourself -
http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm
What you won’t read in the announcement is the real story. That you can only get from studying the different tables provided. Please allow me to summarize what those tables reveal. As a result of the closer scrutiny, the CFTC suddenly "discovered" that a very large trader in crude oil needed to be reclassified from the commercial category to the non-commercial category because the position that this trader held did not represent a bona fide hedge and was, therefore, a speculative position.
What was shocking about this position is its size. This one trader held a spread position of 147.000 contracts in NYMEX crude oil futures and a spread position of 326,000 contracts in futures and options combined, a position of more than 10% of both the entire futures market and futures and options combined. While this percentage of concentration does not come close to the concentrations in silver or gold, it was still largely unknown that one trader held such a large position in crude oil, even if it was a spread position (being long and short different contract months simultaneously.
Of course, the CFTC did not identify this trader by name, as that is contrary to current law (why, I am not sure), but the Commission clearly revealed the trader by size. To give you some perspective of the size of this trader’s futures only position, in the non-commercial spread category to which the position was reclassified, this single trader holds a position more than 90 times as large as the average trader in this category (147,000 contracts vs. an average spread position of 1,630 contracts). How could such a dominant position not control spread price changes?
posted by Andrew at
5:01 PM
2 Comments:
You’re buying ETFC because it’s cheap at $3? Or you think it’s a takeover target ?
Of-course they have one of the best software and trading platform in the industry.
But unknown loses, slow or no growth... also they have been issuing more shares for rasing cash, so by proxy it’s for sale...
I see several attractive elements:
* A few million users
* ~$25B in assets
* $1.5B+ in cash
In other words, before we look at the troubled debt, they have $3 cash value plus the value of millions of clients (which goes to your acquisition point).
I have not read that they are selling shares - maybe I missed that article. I am familiar with them selling off non-core assets to raise cash, like the recent ~$500M Canada sale
Meanwhile, current business is amazing. Because of the huge volumes trading in the market today (~2X a few months ago), ETFC is generating a lot of revenue (they were expected to hit $300M and hit $500M).
I'll be doing an ETFC specific post, but they are actually doing very well imho
In 1 year, the debt issue is gone and people will wonder why they are so cheap
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