Fluctuations in the cost of Crude Oil dropped below the negative margin earlier this month, with valuations still depleting and showing no signs of returning to normal during the global pandemic. Financial institutions in standard and online markets are working towards new products that can service commodity traders throughout this unprecedented time. The 1st blockchain brokerage house to announce a new product to combat unfavourable oil valuations is ISPrime FX. Jonathon Brewer confirmed that they’re targeting the UK Oil Index by implementing two new products, which operate under proprietary technologies. These services will assist ISPrime FX in accepting negative rate trades under the UK Oil Index.
The United Kingdom remains under Draconian Law, meaning their lockdown measures are severe and can see significant penalties if disobeyed. Millions in Great Britain are unable to complete their working obligations, cannot travel more than a 2KM Radius, and cannot visit their local family members. Informative individuals educated on the global financial market have used this time of exclusion towards increasing their portfolios. The unexpected decline in Oil Commodities throughout financial markets has caused for brokerages to have an oversupply. ISPrime FX is one of those brokerages affected by the oversupply, prompting them to create these two new proprietary products. It’ll enable them to begin trading off this oversupply of oil commodities slowly.
It should be mentioned that the negative margins associated with oil commodities have nearly bankrupted retail brokers, ranging between small-scale operations and notable brands. ISPrime FX is a Mid-Ranged Brokerage House that’s seen trading margins with oil commodities drop to 0%. It’s anticipated that these unfavourable oil valuations are costing ISPFX £5.00 per commodity. This means thousands are being spent daily to hold these supplies, with investors not willing to purchase oil commodity stocks because the market will never be the same again.
Brewer Remarks on Catastrophic Conditions
The Oil Commodity Market will continue to fluctuate for a prolonged period, with the underlying volatility impossible to predict. It’ll be a transition process for both investors and brokerage houses, with ISPrime FX recognizing this reality. The liquidity provider will continue to transition at the best of their capabilities, assisting markets like the United Kingdom and the United States with new financial products.
The Managing Partner with ISPrime FX, Jonathan Brewer, provided insightful details on these new products. His statements revealed the following: “Many brokers have not recognized the truly catastrophic effect that negative rates can have on them. Individual retail brokers could face losses in the hundreds of millions of dollars due to stop-outs at 0 and subsequent hedges at a negative rate. Our new fully proprietary Oil Index allows brokers to offer pricing and execution in these products to their clients even if the market drops below 0 again, which is highly probable coming into the next futures expiry.”
Brewer finished his remarked by mentioning: “There will be other providers attempting to develop a solution through third party pricing but, as the market has come to expect from ISPrime FX, our products are carefully thought out and well-engineered. We are pleased to be able to offer continuity of service to new and existing clients and to have delivered a new product in a short timeframe when it is most needed.”