Now That’s What I Call an Outtrade!

In the futures pits, the bane of traders’ existences was an outtrade-when a trade was submitted for clearing but the buyer and seller couldn’t be matched.  An outtrade could be due to a difference or price or quantity.  The worst kind was when both parties thought they were on the same side of the trade.  Another kind of scary outtrade was when a trader said he bought, but there was no matching sale, or the reverse.

Ukraine and a Spanish company have such an outtrade apparently.  To the tune of $1.1 billion:

Ukraine, keen to show it is weaning itself off Russian gas, announced on Monday it had created a consortium to build a $1.1 billion liquefied natural gas plant, but its reported partner, Gas Natural of Spain, swiftly denied any involvement.

Ukraine said it would build the first LNG regasification terminal within its borders, in partnership with Gas Natural, which would allow it to import gas from all over the world, breaking its dependence on Russia.

But Gas Natural flatly denied signing any deal with Ukraine.

“Gas Natural has not signed any contract to invest in an LNG plant in the Ukraine, nor are we leading any consortium to develop such a terminal… nor are we studying anything along these lines,” the company said in a statement. [Sounds pretty definitive!  No ‘effing way I traded with you lot. I didn’t even think about trading with you lot.]

. . . .

Even after the official denial by Gas Natural, Ukraine’s state investment agency insisted the deal had been signed and said it was looking into the report stating otherwise.

“There must have been some miscommunication,” a spokeswoman for the agency said.

A miscommunication.  Over $1.1 billion.  It could happen to anyone!

As sometime commenter Elmer says, Ukraine is sovok.  It shows, and maybe this is an example of that.  But I wonder if sovok central-Russia-put the word in a Spanish ear.

Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!

About Craig Pirrong 238 Articles

Affiliation: University of Houston

Dr Pirrong is Professor of Finance, and Energy Markets Director for the Global Energy Management Institute at the Bauer College of Business of the University of Houston. He was previously Watson Family Professor of Commodity and Financial Risk Management at Oklahoma State University, and a faculty member at the University of Michigan, the University of Chicago, and Washington University.

Professor Pirrong's research focuses on the organization of financial exchanges, derivatives clearing, competition between exchanges, commodity markets, derivatives market manipulation, the relation between market fundamentals and commodity price dynamics, and the implications of this relation for the pricing of commodity derivatives. He has published 30 articles in professional publications, is the author of three books, and has consulted widely, primarily on commodity and market manipulation-related issues.

He holds a Ph.D. in business economics from the University of Chicago.

Visit: Streetwise Professor

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.