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The Power of Round Numbers
On Wednesday, Richard Arens decided to celebrate the new year by having a bit of fun. He's a "local" who trades for his own account on the floor of the Nymex, and he bought exactly one crude oil contract at exactly $100 per barrel, a level roughly 50 cents higher than the prevailing price, for an immediate mark-to-market loss of something over $500. Here's the FT's Javier Blas:
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 result of this New Year's prank? Well, let's just say that the front page of Thursday's Wall Street Journal was a banner headline saying "Oil Hits $100, Jolting Markets". There were two big articles below that headline, and the coverage continued on most of page six, all of page seven, and most of page eight. And that's just the first section of one newspaper; the total amount of coverage expended on this one trade, across all media and all countries, is mind-boggling to contemplate. Richard Arens is surely giggling, somewhere.
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