Welcome to NexusFi: the best trading community on the planet, with over 200,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- discounts are available after registering.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
For an assignment, I need to estimate on the basis of market data, what would've been the liquidity premium on a certain Dubai crude oil forward deal as of 30th Jul, 2014.
Deal details: 12 mn barrels for one year calendar spread.
Also, there's a flexibility to adjust the volume every month as per that month's actual exposure. (i.e., while the deal talks about a notional vol of 12 mn bbl, the actual vol can be 11 mn, or 13 mn ... ). For this flexibility a 5-6 cents/bbl premium has been charged. I also need to validate on the basis of market data if this premium is correct.
Any help would be greatly appreciated.
Can you help answer these questions from other members on NexusFi?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,241 since Dec 2013
Thanks Given: 4,586
Thanks Received: 10,532
What does this actually mean? What is the pricing mechanism? What is the delivery mechanism.
It will depend upon how the crude is priced. In its simplest form this could be priced as an 11 kkb forward with a 2 kkb option but I suspect that pricing and logistic constraints mean it's not that simple.
