WTI Crude Oil - Get paid for Purchasing
This year 2020 will be remembered in global history for a very long time to come. Some boundless imaginations of our wildest dreams have now become a reality. The WTI Crude Oil future became negative, a situation where the cost of one barrel became more than the oil in it. Source: CNBC The clickbait headline of the day is "Crude Oil future collapsed to a historical low of -$37.63 per barrel". Although, I am no crude oil expert, but many people are under the impression that they will get the oil for free and it is a once in a lifetime moment for India. Let's have a brief look at this Crude Oil sudden demise. To begin with, the -$37.63 per barrel is a futures contract price, not a spot market price. If you are LONG a future, then unlike an option, you have to exercise it necessarily. When a futures contract expires, traders must decide whether to take delivery or roll their positions into an upcoming contract. Most of the speculators either go for a rollover or take a profi