Customers of one of China’s leading big state-owned banks have lost around USD$85 following the purchase of speculative investment products linked to crude oil.
Hundreds of Bank of China’s (BOC) retail investors have lost around 600 million yuan (approx. $85 million) after placing bets on West Texas Intermediate via speculative products provided by the bank.
According to sources the majority of around 3,700 customers who purchased BOC’s “Crude Oil Treasure” used the product bet that bet that oil prices would rise.
The “Crude Oil Treasure” product enabled China’s domestic investors to tap WTI oil futures without the need to launch an offshore account. The product did not permit leverage and required 100% margin.
A plunge in oil prices to below zero at the start of the week has left these investors owing 400 million yuan to BOC, on top of around 200 million yuan in initial losses.
Hundreds of these aggrieved investors have complained about BOC in China’s online forums, and demanded that it bear some of their losses.
BOC settled the outstanding positions of clients who purchased the product on April 20 at negative 266.12 yuan a barrel, claiming that it did so in accordance with prior guidelines.