Posted on 06/15/2008 8:12:08 AM PDT by kellynla
Are you speaking of an EFS transaction?
Need a bit of help here.
BTW, you might be amused by the NYMEX' treatment of EFS trxes. Here's their rule:
========
200.20A Exchange of Futures for, or in Connection with, Swap Transactions
(A) An exchange of futures for, or in connection with, a swap (EFS) consists of two discrete, but related, transactions; a swap transaction and a futures transaction. At the time such transaction is effected, the buyer and seller of the futures must be the seller and buyer of a quantity of the swap. The swap component shall involve the commodity underlying the futures contract (or any derivative, by-product or related product). The swap component of an EFS transaction must comply with the applicable CFTC swap regulatory requirements.
(B) Except as provided below, an EFS must take place during the hours of futures trading for the Light Sweet Crude Oil futures contract. An EFS is permitted at any time before 2:00 p.m. of the first business day following termination of trading in an expired futures contract, provided, however, that an EFS which establishes a futures position for both the buyer and the seller shall not be permitted on the first business day following the expired contract.
(C) Any Exchange of Futures for, or in Connection with, Swap (EFS) shall be governed by the provisions of Rule 6.21A.
(D) Each buyer and seller must satisfy the Exchange, at its request, that the transaction is a legitimate EFS transaction. All documentary evidence relating to the EFS, including a master swap agreement and any supplements thereto, shall be obtained by the Clearing Members from the buyer or seller and made available by the Clearing Members for examination by the Exchange upon request. Additionally, if the buyer or seller is a Member/Member Firm, the Exchange may obtain the information directly from such persons.
I don’t know what I’m talking about either. Just trying to quote something from the NYMEX web site and pretend I know what it means.
Is the swap only when you change to a related product like from WTI to RBOB?
exchange of futures for or in connection with the product
and
exchange of futures for, or in connection with, a swap
http://www.nymex.com/rule_main.aspx?pg=32#200.20
Swaps are just about completely ''roll-your-own''. There are a number of things NYMEX won't let a swapper do, but this -- trust me -- is just not very hard to get around, as long as one knows a good cash broker. Might cost a bit more than one would like, but virtually any physical swap (as opposed to a paper swap) can find a way to get done.
I'll bet you that Eric in the Ozarks knows all about swaps -- might ask him for more details.
Back in my cash broker days, just about all we did were ''immediates'', no noticeable time lag involved. So, I have to ask you why a contango mkt is so easy to trade, and, would you be kind enough to throw in an example?
The price of oil is set by the buyer not the seller or the speculator.
If all the speculators went away, the price of oil would be set by the buyer still.
In fact, to quote you: "Over 95% of all crude contracts are NOT settled by delivery..."
Indeed, 95% of contracts are canceled before the delivery date, and are sold back into the market before delivery date. Why? Because the bottom line is at each month end, someone actually takes delivery of oil thereby setting the price.
We have to fight this issue with all we have left in our bones not by enjoying our knoledge of the markets and speaking market geek, but by reducing the truth to street language so that the average guy in the street knows what this "Federal Market Regulation" is really all about, his retirement being feed to the political pork machine.
The primary reason the American Stock Exchange is the best in the world is we provide a tax haven for overseas investors. If we let the Demoncratic or RepublicRat rulers control the market, all the foreign cash will flow out of the market like Niagra Falls flows from Canada. Our economy will crash like Nagasaki. The Politicians won't care, they will be extracting a percentage of the flow into their own pockets. In the end, they will all be like Al Gore, preaching Prosperity to Paupers and riding gold plated BMW's...
''Go 'way, little boy, ya baahhhther me.''
The price of anything, you bloody moron, is set by a willing buyer and a willing seller when they agree on a price.
If specs went away from some mkt, entirely, what would happen is that the bid/ask spread in that mkt would widen out considerably, everyone's costs would go up, and there would be considerably fewer transactions in that mkt.
By the time ANYBODY in crude gets delivery, the price is absolutely guaranteed to have changed from both their entry price and the price at contract expiration. There's a lag of 15-45 days between contract expiration and delivery, therefore NEITHER the person making delivery nor the person taking delivery ''sets'' any sort of price whatever.
Take your economically illiterate gradeschool garbage out somewhere and bury it. Don't bother getting a life; get a clue about the operation of mkts somewhere.
Hey, maybe you can buy a clue, and ''set the price''. Jay-zus!
So, you are saying that a speculator cannot set the price? That is the point I was hoping to make. Perhaps you said it better.
You know, you really don't have to be such an asshole to someone to hold a conversation... That clue is free by the way.
The price of anything, you bloody moron, is set by a willing buyer and a willing seller when they agree on a price.
...therefore NEITHER the person making delivery nor the person taking delivery ''sets'' any sort of price whatever.
No comment.
ping
I concur with that.
My company had a 3D seismic survey done over minerals it was considering selling for $10 an acre.
We leased the land to another company and this little 200 acre Yegua field is generating checks to us in excess of $1 million per month today.
This tired old land position which everyone had discounted as virtually worthless, is generating nearly a quarter of a billion dollars in 2007. It will be higher this year.
NO speculator, or group of same, can ''set'' a price, period. They can, however, over time influence price disproportionately when they are allowed to by current rule, and for MUCH longer than a month at a crack...and so they have done for the past 1.5 years, in energies particularly, and now in grains to a larger than usual extent.
After 36 years of trading these markets, and after 20 years of writing about them, and after seeing -- as I put it in a fairly recent book -- the growing presence of ''moonshiners, mythologists, and morons''. my patience with willfully and provably false statements has declined almost to nil.
You're looking for a villain in bidding up mkts to unjustifiable levels? You've no further to look than the Regress, who, by provisions of the 1986 Tax Reform Act, the Gramm-Whoozis Act of 1999 which effectively repealed Glass-Steagall, and the Commodity Modernization Act of 2001 -- among other legislative bungles -- have allowed what we now call ''index specs'' to prosper at the expense of the entire economy, and every citizen of the US.
''No comment'' is the single most intelligent thing you've written during our conversation. Nicely done!
I have noticed as of late, a lot of discussions around and about oil price crisis. Thats it! Discussions, no concrete proposals as to how we force the Congress to open up the continental US for drilling and/or shale oil recovery., etc,etc.
We need a grass roots movement of regular Joe's to knock the Environmental wackos agenda and force the Congress to LISTEN to the people for a change, not the special interest.
I am not good at this kind of job, PR is not my forte, but I think if we get together and unite under a common cause we can achieve it. Why can we not sue the Environmental Wackos for interfering with "Promote the general Welfare" as stated in the Constitution?
Let's not be just keyboard cowboys/cowgirls and start something that it will make a difference.
FR is a very large forum, with a little perseverance and organization me thinks we can pull it off! It is just a matter of willingness and desire!
WE are better than Kos, DU, Huffington's etc.They are getting away with murder, while we the almighty principled conservatives are taking the high road an do...nothing.
We are getting railroaded day in and day out and what we do?...nothing..."If we WANT to win anything in this race, we should drop this cavalier, "holier than thou" attitude towards politics, take off the gloves and start punching hard!period!
NWO PING to some selected friends from one of my lists.
Please read at least a percentage of the color highlighted quotes at post # 76.
Quotes of political leaders since 1900 re globalism and global government.
TREASONOUS, ALL.
Sen. Barack Obama, if elected, intends to seize "windfall profits." This is sufficient reason for American oil companies to decide to drill anywhere else. The last time a windfall profits tax was implemented was at the end of President Carterâs term. It had such a negative impact on U.S. oil companies that drilling for oil domestically dropped dramatically. It has stayed that way since the 1980s... No profits. No exploration. No drilling. And no domestic oil with which to correct our dependence on foreign oil and thus provide a measure of security to a nation that runs on oil.Thanks Quix.
Doesn’t surprise me.
I felt that was their strategy from the beginning of the movement.
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