But the other banks set their settlement date five working days before the last trading day of the underlying contract. Industrial and Commercial Bank of China (ICBC) and China Construction Bank also offer similar products. A bank trader said this was a situation where the “trading mechanism encountered an extreme situation in the extreme.” But multiple bank traders told Caixin that the settlement date was set well in advance, so it wasn’t as if the bank had suddenly changed it. The oil price slump left the investor owing 5.3 million yuan to the bank. One investor took a 9.2 million yuan ($1.3 million) loss on a 3.9 million yuan investment in the product, according to a document circulating online. In either case, investors with long positions suffered losses.īoC said Wednesday that investors still need to settle their positions at the Monday WTI settlement price, and the bank has completed settlement of all May contracts. It also happened to be the day that BoC had set for investors of the product’s WTI-linked contracts to settle up, either by simply closing their positions or rolling over their contracts - opening positions for June contracts while closing their May contracts to maintain their investments. Monday was the worst day for the price of oil in at least a generation. On Tuesday, BoC suspended trading of the oil futures product’s WTI-linked contracts for one day.
A negative value means producers would have to pay buyers to take delivery of oil. The bank made the decision after the value of the WTI crude May futures contract plunged to a record low of a negative $37.63 a barrel Monday, the day before the last trading day of the front-month contract. It will still allow clients to close positions. (BoC) lost millions of yuan in the collapse of global crude prices, and they blame the bank for the losses amid the market turmoil.īoC suspended clients from opening new positions in its Yuan You Bao product starting Wednesday, which is based on overseas crude oil futures, including West Texas Intermediate (WTI) and Brent contracts, citing current market risks, the bank said in a statement (link in Chinese).
Investors in a crude futures product sold by Bank of China Ltd.
0 kommentar(er)
