Finance
Hong Kong Oil ETF’s Broker Refuses to Let It Buy Futures
- The move forces Samsung’s oil ETF to stop issuing new shares
- Fund also bought put options, will adjust futures positions
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The manager of a $500 million oil exchange-traded fund said its broker refused to let it increase holdings of crude futures, a sign of continued risk aversion in global oil markets after last month’s historic plunge below zero.
As a result of the broker’s ultimatum, the Samsung S&P GSCI Crude Oil ER Futures ETF will halt issuance of new shares starting Monday. The Hong Kong-traded fund also bought put options to protect against negative oil prices and will adjust its existing futures positions, moving from a 100% weighting in September West Texas Intermediate contracts to an equal weighting in September, October and December.