“Do you think these kids grew up and became Snowflakes!?”
Today sees a marked increase in oil VIX, as inventories balloon higher, and
it’s becoming painfully clear that China is walking away from any trade deal
… and that means lower world oil demand and lower prices … and judging
by the way the WTI crude oil CFD is responding today, traders are hitting
the exit gates from bullish positions and/or getting short.
We also have seen bid/offer spreads go up today … more along the lines of 4
cents versus 3 yesterday at Coinexx, and where Turnkey is simply not in the
same league. 4 cents doesn’t provide as good of a deal, naturally, but anything
5 cents or more and you have to walk away from the market, cuz you’re
giving too much up … oil simply isn’t worth it when bid/offer spreads are 5
cents and above.
With a 3 cent spread, Coinexx’s CFD actually is a far better deal than the
CME’s e-mini oil futures contract. Remember, the e-min is 500 barrels [½ the
size of the regular contract], and trades in 2 ½ cent minimum tick size.
Looking around at the various futures brokerage houses, about the best
round turn commission rate you’re going to get is about $1.25 per side, or
$2.50 per round turn. However, if you trade futures in energy, you have to
pay the CME price feed, which runs about $50 - $60 per month, unless you
trade more than 500 contracts per month. Do the math and the CFD is a
better deal. At 4 cent spreads, the math is slightly against you, but not a deal
killer, and remember the round turn commission at Coinexx is ⅕ a cent, so
it’s not anything that matters.
But the real question is, is oil the last free market [kinda] left to trade,
without overt manipulation? … and the answer is YES … granted, you got
tin horn dictators and the OPEC crew that do their best to produce as much as
they can, while talking out of the other side of their mouths and talking
production cuts … so yea, there is some manipulation from Vlad and the boys,
but there isn’t any government manipulation from the FED, and that’s a big
plus and a very big reason to trade the CFD.
All the other financial markets are manipulated to their teeth, but oil remains
resilient cuz 1) it’s the world’s largest commodity by far, and 2) you actually
have to take delivery of, or take possession of, any oil you buy or sell if you
hang on … meaning, it’s NOT cash settled and can be manipulated via the
CNTRL-P button and washed through the scumbag LP banks, with nobody
seeing the manipulation. Way too many eyes that would see actual oil change
hands if they decided to get their hands dirty.
And while I already mentioned the CME price feed fees you get to pay, for the
privilege of trading their futures [cough, bullshit, cough], another reason to
avoid the futures exchange and go offshore for the CFD, is the fact there are
no reporting requirements to the tax authorities … not encouraging anything
as regards to taxes, simply stating a stone cold FACT. Of course, the reason
most of the world trades CFD’s and avoids futures, is that CFD’s are
considered as legal bets [hence, the term “spread betting”], and therefore are
tax free most places. Why trade futures and pay taxes on gains, when you can
trade the same “Hoover Dam” thing as a CFD and it’s tax free? … duh.
As we move into the afternoon trading, WTI hanging around 61.00, which is
the low end of this range we’ve been in for a month … with a $2 range today,
more than likely we won’t see further downside action … but who knows with
oil … tomorrow becomes more interesting, though, as we’ll see what China
does overnight and how Europe handles their open for Brent … until
tomorrow mi amigos!
Have a great day everybody!
-vegas
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