RE:RE:Octane its not about market sentimentYou beat me to the reply Greenday... there's no correlation what so ever to the last financial crisis and today's oil trading.. as per your explanation.. Greenday wrote: @ GambinoB - Basically every mid-cap and large-cap stock with decent volume is going to have algo's trading it. And there are a variety of reasons why they are run. One algo sponsor may be running an iceberg algo to enter or exit a position without unduly affecting the market price, while another sponsor may simply be scalping the market.
As you're probably aware, the financial crisis was the result of lax lending practices that ended with central banks needing to backstop leading financial institutions to unfreeeze the flow of financial instuments. Financial institutions didn't know if the financial insturments held by counter parties were any good or not and as it turned out, many were not.
The big difference imho between the financial crisis and what you're talking about is that shorting the oil market into oblivion and then covering is unlikely to have a contagion effect like that of the financial crisis because as the price of oil increases, demand destruction and marginal supply advance.