storage
I keep reading about places where commodities are stored... i read a while bac that the highest useage of shipping containers at one point was from banks who would hold oil in them off the coast. I just read about copper being stored in some place...
now i thought that by storage they meant just at a future time they would have access to whatever it is.. oil cooper etc. at the previous price (futures contract)
Whats the question>?
lol which is it? both? are there actual physical sites where they store commodities (not including reserves)
ofcourse there is physical storage. how else do you buy something today to sell it tommorow to take advantage of contango?
the same way stocks are traded? a paper saying u have X amount at X price?
Commodities futures settle to the physical item, that's how things like contango/backwardation can possibly exist, or else you could just put on the spread between two expiration months and make infinite money.
If you're bored, you can try calling up a tanker company and asking how much it would cost to store X barrels of oil for a month. I'll bet you'll find it is exactly the amount of money that it looks like you could make by buying front month futures and selling 2nd month futures.
As for the banks having their own storage facilities/tankers, it wouldn't surprise me if they rented them from time to time. A friend at D. E. Shaw told me he heard that Shaw had rented an oil tanker for a few months to pull off an arbitrage a few years before he started. Can't verify the story, but it seems perfectly reasonable that commodities desks at banks/hedge funds would sometimes (rarely, mind you) choose to take/make delivery rather than close out their contracts.
Esse reiciendis quo eaque aut recusandae. Odio placeat odio suscipit ea quam sunt possimus. Sit eos eos est at. Sed repellat in perferendis vel ut voluptatem vero natus. Et repudiandae autem dolorem voluptate. Minima illo temporibus maiores omnis.
Optio non nostrum excepturi illo. Dolores perspiciatis non repellendus nihil sapiente. Dolore sint ipsa voluptas veritatis ea commodi.
Molestias eligendi aperiam a dicta. Expedita qui deserunt id voluptatem sunt facilis aut harum.
Quasi quod magnam delectus ullam quae cumque architecto ullam. Officia soluta suscipit eius. Omnis quia dolorem saepe et veniam. Exercitationem expedita sit voluptates quia. Occaecati voluptatibus voluptas et voluptatum provident fuga doloremque. Est sapiente perferendis aut omnis voluptas.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...