Can someone summarize the issue?
My guess - most energy related derivatives ultimately require the physical delivery of the energy product by a certain date.
My guess - since Putin has shut off natural gas to Europe, there will be no product to deliver on derivative expiration dates, which essentially means that billions of dollars of underlying derivatives are completely worthless.
Energy derivatives are not just a gamblers paradise.
They are legitimately used by thousands of companies that must hedge against the price volatility of energy products.
Thanks in advance to anyone with a Financial Times subscription!
Futures markets are used by hedgers and speculators who improve the efficiency and liquidity of markets. But they don’t control everything so sometimes events overtake them, just like in the securities markets.