> There was even a brief moment when the price of an oil barrel went negative

More accurate: The price for an _option_ to buy/sell oil was negative, not the price of the barrell itself.

kristjansson 2 hours ago | parent | next [-]

No, the price of a contract for future delivery to a specific location went negative just before the delivery date, at a time when there was almost no unoccupied oil storage nor transport capacity at said location.

In that circumstance you might sell your right to some oil for almost nothing rather than deal with the consequences of accepting it. You might even pay someone to take it off your hands.

Options is “right but not obligation”. Physically settled futures are an obligation at maturity.

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KellyCriterion an hour ago | parent [-]

Thanks for correction, that is true!

(Both instruments are not that popular in my country, so my daily language is to put both of them as synonym, while they are different animals in some details)

	▲	kristjansson an hour ago \| parent [-]
		There are cash settled futures there are closer to options in that they’re purely financial, but even those don’t have optionality at maturity. Generally a dangerous thing to have as synonyms regardless, otherwise you end up with a coal barge in the east river https://thedailywtf.com/articles/special-delivery

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duskdozer 2 hours ago | parent | prev [-]

How could the option price go below 0? Why couldn't someone just not exercise it in that case?