"Someone (or a group of someones) likely made nearly a billion dollars by manipulating the market for those 10 minutes. That inquiry has not been opened."
That was my first thought when I read about the post and yhe subsequent deleting of it. With this corrupt regime full of criminals and grifters they should always be presumed guilty until proven innocent. Because they're always guilty.
Spencer’s answer is Chris Wright. You are spot on. No accountability anywhere and rampant normalization of corruption. The other question? Who lost $100 million in those three minutes?
Options markets are essentially zero-sum on the payoff side—every dollar someone makes is a dollar someone else loses.
We can’t know the exact counterparties, but we know who typically sits on the other side of oil options trades.
First are market makers. These are the large banks and trading firms that provide liquidity in derivatives markets—Goldman, JP Morgan, Citadel, Jane Street, etc. They sell options to traders and hedge dynamically using futures. If a sudden geopolitical or policy move causes oil to jump and their hedges lag for even a few minutes, they can take large losses.
Second are producers hedging production. Major oil companies frequently sell options or use derivatives to lock in prices for future output. If prices move sharply against those hedges, they can temporarily be on the losing side of the trade. Think Chevron, Exxon, and similar players.
Third are commodity trading houses and hedge funds. These firms also trade oil derivatives, sometimes for physical hedging and sometimes for speculation.
In practice, the losses are usually spread across many institutions rather than one unlucky counterparty. Modern markets are heavily intermediated and hedged, so a large gain on one trade often gets distributed across several firms’ books.
And while $100 million sounds enormous, in global oil derivatives markets it’s actually not a system-level number. The daily notional volume in crude options and futures runs into the hundreds of billions.
So the most likely scenario isn’t that one institution was wiped out. It’s that several liquidity providers briefly found themselves on the wrong side of a sudden move, took a hit, adjusted their hedges, and moved on.
Thanks, I suspected the loss was distributed which is of course the perfect crime, almost victim-less except the system is compromised. As you say we are the victims.
And lives are lost in the crossfire, and the world goes around and around….lies, greed, corruption and loss of trust. Is the pursuit of more so powerful that no thought is given to what kind of world your children and grandchildren will inherit?
As a not-financially-adjacent mind, that was a terrific little short-course in unintentionally fucking with the market impact of political messaging. Thanks from the bottom of my brain. :D
"Someone (or a group of someones) likely made nearly a billion dollars by manipulating the market for those 10 minutes. That inquiry has not been opened."
That was my first thought when I read about the post and yhe subsequent deleting of it. With this corrupt regime full of criminals and grifters they should always be presumed guilty until proven innocent. Because they're always guilty.
Spencer’s answer is Chris Wright. You are spot on. No accountability anywhere and rampant normalization of corruption. The other question? Who lost $100 million in those three minutes?
That’s an excellent question.
Options markets are essentially zero-sum on the payoff side—every dollar someone makes is a dollar someone else loses.
We can’t know the exact counterparties, but we know who typically sits on the other side of oil options trades.
First are market makers. These are the large banks and trading firms that provide liquidity in derivatives markets—Goldman, JP Morgan, Citadel, Jane Street, etc. They sell options to traders and hedge dynamically using futures. If a sudden geopolitical or policy move causes oil to jump and their hedges lag for even a few minutes, they can take large losses.
Second are producers hedging production. Major oil companies frequently sell options or use derivatives to lock in prices for future output. If prices move sharply against those hedges, they can temporarily be on the losing side of the trade. Think Chevron, Exxon, and similar players.
Third are commodity trading houses and hedge funds. These firms also trade oil derivatives, sometimes for physical hedging and sometimes for speculation.
In practice, the losses are usually spread across many institutions rather than one unlucky counterparty. Modern markets are heavily intermediated and hedged, so a large gain on one trade often gets distributed across several firms’ books.
And while $100 million sounds enormous, in global oil derivatives markets it’s actually not a system-level number. The daily notional volume in crude options and futures runs into the hundreds of billions.
So the most likely scenario isn’t that one institution was wiped out. It’s that several liquidity providers briefly found themselves on the wrong side of a sudden move, took a hit, adjusted their hedges, and moved on.
Thanks, I suspected the loss was distributed which is of course the perfect crime, almost victim-less except the system is compromised. As you say we are the victims.
And lives are lost in the crossfire, and the world goes around and around….lies, greed, corruption and loss of trust. Is the pursuit of more so powerful that no thought is given to what kind of world your children and grandchildren will inherit?
There’s an electronic trail somewhere….
As a not-financially-adjacent mind, that was a terrific little short-course in unintentionally fucking with the market impact of political messaging. Thanks from the bottom of my brain. :D