A Trade for Glory

One big trading position can have a global impact: Think of George Soros' gamble against the British pound in 1992.

On Wednesday, it was just one small trade that quickly reverberated around the world.

Nearly 10 minutes after noon that day, there was a single buyer on the floor of the New York Mercantile Exchange for the February contract for West Texas intermediate crude at $100 a barrel. (Each lot in the contract consists of 1,000 barrels.) At the time, oil was trading for about 40 cents less.

Alas, the price of $100 did not hold as the futures contract retreated immediately afterward, to about $99.40 a barrel.

Still, the one trade, for 1,000 barrels, secured the kind of fame that $100,00 cannot ordinarily buy.

The $100 trade set off headlines and news alerts, spurred OPEC officials to speak out, and sparked discussions about the global balance of power between oil producers and consumers.

The Wall Street Journal and the Financial Times have identified the buyer as Richard Arens, who runs Arens Brokerage Service.

Stephen Schork, a former Nymex floor trader and editor of the oil-market Schork Report, commented: "A local trader just spent about $600 in a trading loss to buy the right to tell his grandchildren he was the one who did it. Probably he is framing right now the print reflecting the trade."

The loss is roughly what Arens donated to the Nymex Charitable Foundation in 2006. Now, the cause appears to be furthering the rally in oil.

Arens' motivations are not known: Neither paper could find him for comment.

But Simon Nixon in Breakingviews.com says that if Arens is interested in making history, he should pursue other avenues for "market immortality": say, being the first to pay $1,000 for an ounce of gold or $1.50 for a euro.

Jeffrey Cane

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