By Friday afternoons, the atmosphere on commodity trading desks undergoes a significant shift. For the first four days of the week, traders focus on making profitable bets. However, by lunchtime on Fridays, their attention turns to assessing the level of risk they can tolerate until markets reopen on Sunday evenings. The 48-hour period when markets are closed can be particularly challenging for traders holding positions tied to highly active markets, as they are unable to adjust or rebalance their bets during this time.
According to Mustafa Al Niama, former head of digital assets at Goldman Sachs, 'from around lunchtime, the desk essentially stops thinking about generating profits and starts considering what they can live with for approximately 48 hours until the Sunday evening reopening.' This ritual is familiar to every commodities options trader, who, by the end of the week, is more concerned with whether they are comfortable holding their position if something unexpected happens while markets are closed, as they cannot adjust their bets over the weekend.