@article {Ma9, author = {Lingjie Ma}, title = {Negative WTI Price: What Really Happened and What Can We Learn?}, volume = {29}, number = {3}, pages = {9--29}, year = {2022}, doi = {10.3905/jod.2021.1.141}, publisher = {Institutional Investor Journals Umbrella}, abstract = {The price of West Texas Intermediate futures contracts fell into the negative on April 20, 2020. In this article, I investigate underlying factors that contributed to the negative price and propose rule changes. I begin with the causes: first, because of the COVID-19 pandemic and an oil price war, an oil oversupply and storage shortage put significant downward pressure on oil prices; second, CME Group made policy changes in early April allowing negative prices; third, heterogeneous trading activities of retail investors and speculators contributed to the negative price on April 20. To improve market efficiency and fairness for market participants, I propose rule changes, such as more advance notice for market rule changes, robust alternatives for settlement price construction, and appropriate limit on trade-at-settlement contracts.}, issn = {1074-1240}, URL = {https://jod.pm-research.com/content/29/3/9}, eprint = {https://jod.pm-research.com/content/29/3/9.full.pdf}, journal = {The Journal of Derivatives} }