Timing strategy performance in the crude oil futures market

A-Tier
Journal: Energy Economics
Year: 2017
Volume: 66
Issue: C
Pages: 480-492

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The rewards to speculative trading in the crude oil futures market are assessed. For investors who adopt timing strategies that maximise their (iso-elastic) utility during each trading session, the rewards can be economically significant providing that transaction costs are small. Moreover, we are able to show via a decomposition of performance that the bulk of this benefit is due to their ability to predict realised volatility (that is, the second realised moment). The benefits derived from predicting other realised moments either require unrealistic levels of skill (all odd moments) or an infeasible degree of risk aversion (the fourth moment and higher even moments).

Technical Details

RePEc Handle
repec:eee:eneeco:v:66:y:2017:i:c:p:480-492
Journal Field
Energy
Author Count
1
Added to Database
2026-01-29