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Negative price

A situation in which a party pays to hand an asset over: holding it costs more than giving it away.

How to read the number

It happened in April 2020 in the front-month US oil futures contract: storage was full, and a physically settled contract obliged the holder to take delivery of barrels with nowhere to put them.

When the metric lies

Some trading systems did not admit values below zero and could not accept such an order — the risk turned out to be technical as well as financial.

Also known as: negative oil price

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