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To: dynoman
Are you implying non-delivery speculators are super altrustic people with the good of the market and consumer at heart?

A speculator is only going to make money if he purchases goods cheaper than he sells them. His actions will thus increase prices when they are low, and reduce them when they are high. A speculator will make the most money if he buys at the bottom of the market (reducing its depth) and sells at the top of the market (reducing its peak).

Occasionally the market can get rocked by 'pump and dump' speculation, wherein someone who bought goods cheaply encourages people to keep buying them at prices well above market equilibrium (such action in turn pushing market prices higher). The agitator then sells his goods before the market comes crashing down. Such actions can hurt people outside the futures market (by pushing price peaks higher than they would otherwise go) but most of the cost for such action will be borne by the suckers who kept buying into the market and pushing it higher.

170 posted on 06/02/2007 1:21:31 PM PDT by supercat (Sony delenda est.)
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To: supercat

“A speculator is only going to make money if he purchases goods cheaper than he sells them.”

What “goods” is a non-delivery speculator buying?


173 posted on 06/02/2007 1:57:14 PM PDT by dynoman (Objectivity is the essence of intelligence. - Marylin vos Savant)
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