Source: Sina
Text/Sweet Tea
Following the Sina Financial Research Institute's report on the monthly exchange of ICBC paper crude oil caused customer controversy last week, another bank's paper crude oil business made customers "shiver", and the banking business itself also faces the risk of "turning over".
Last night, WTI May crude oil futures fell to negative value, with an intraday decline of more than 300% at one point, closing at -37.63 USD per barrel. At the same time, crude oil spot in the United States and Canada also fell below the zero line. For a time, the market "wailed everywhere".
Hong Hao, chief economist of BOCOM International, wrote an article saying that the unreasonable plunge of crude oil last night reflected more of the market structure problems. The serious imbalance in supply and demand caused by the new crown epidemic has been infinitely magnified in the market.
Under such an extreme market situation, it is natural that the bank's paper crude oil customers can't survive alone. Early this morning, a customer received an announcement from the Bank of China that the U.S. crude oil contract for crude oil treasure products was suspended on April 21.
Bank of China said that on April 20, 2020, the official settlement price of WTI crude oil May futures contract CME closed at -37.63 US dollars per barrel, closing at a negative value for the first time in history. The Bank of China is actively contacting CME to confirm the validity of settlement prices and related settlement arrangements. Affected by this, the two US crude oil contracts, "US oil/USD" and "US oil/RMB", were suspended for one day, and the UK crude oil contracts were traded normally.
Image source Bank of China customer
The official website of Bank of China shows that crude oil treasure is a trading product issued by Bank of China to individual customers linked to domestic and foreign crude oil futures contracts. According to the reference object of the quotation, it includes US crude oil products and British crude oil products. Among them, the benchmark standard for US crude oil is the "WTI crude oil futures contract", and the benchmark standard for UK crude oil is the "Brent crude oil futures contract", and are denominated in US dollars (USD) and RMB (CNY).
It is understood that similar to ICBC paper crude oil, Bank of China Crude Oil Treasure does not have a leverage effect and releases contracts on schedule. As a market maker, Bank of China provides quotations and conducts risk management. After individual customers open a comprehensive margin account at Bank of China, sign an agreement, and deposit a full margin, they can achieve a two-way choice between long and short.
pictures circulated on the Internet show that as of 17:32 on April 20, a US oil 2005 contract of a Bank of China Crude Oil Treasure customer had fallen by more than 20%. The customer's temporary profit and loss was -177,200 yuan, and his net margin value was RMB 205,400 yuan.
Image source: Internet
What Bank of China customers who currently hold a 05 contract are most confused about is perhaps how to settle the final settlement. Some investors said that the Bank of China crude oil contract he purchased did not actively close the position, and did not know how the Bank of China would settle it; some investors lamented on the Internet that the Bank of China's crude oil contract did not actively close the position in May, but unexpectedly, it would return to zero without leverage...
Some netizens posted a question, will Bank of China organize customers to form a group to deliver? According to what is taught in textbooks, the wisest way now is to choose physical delivery. Some netizens sighed, "I can only say that those who bought the Bank of China 05 crude oil in their previous life were angels who had broken their wings!"
Image source: Weibo
"Group to pull crude oil" is obviously unrealistic, but no matter how the Bank of China crude oil treasure 05 contract is delivered, it is inevitable that customers' investment losses will be lost.
Hong Hao pointed out in the article that retail investors should watch the epic market in this way. "Last night's abnormal negative oil prices confirmed the classic of the A-share market: there are eighteen layers of hell under the floor. Maybe it's because of the current economic downturn, and even hell has started to build infrastructure, and another eighteen layers have been built."
It is worth noting that at around 17:30 today, the main contract of WTI New York crude oil fell sharply during the session, with a drop of 42.29%, and then a slight rebound. As of 17:52, the decline narrowed to 24.14%, at $15.498 per barrel.
Image source: Sina Finance
