Brokers Are Trying to Keep Some Traders Away from Volatile Oil Futures
- Some clients restricted from taking positions in WTI, Brent
- Move comes after oil prices crashed into negative territory
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At least four brokerages are restricting the ability of clients to enter into new trades in the most active oil benchmarks in a bid to curb losses after an unprecedented meltdown in crude this week dragged prices into negative territory for the first time in history.
The limit for these trades comes at a time when financial firms are trying to help clients reduce risk after the spread of the coronavirus has hobbled economies around the world, causing tremendous volatility in oil prices. Front month oil futures in New York crashed on Monday, falling by more than $55 a barrel and then came roaring back on Tuesday, settling up by more than $47 from Monday’s close.