Yes, the NYSE is a market. Full of speculators. Back to my original question, if you were buying (or selling) IBM in your eTrade account, which of the following markets would you prefer?
Market 1, no speculators 104.50-108.50 20x20
Market 2, many speculators 106.45-106.55 300x300
Now, define “efficient” as you think it applies to the market for IBM stock.
A deep market with narrow spreads. You understand what that means?
Part of the speculation play is that BIG OIL has their own buyers, and they buy months and years out to secure the price for their refineries.
Lets say for arguments sake that they bought oil futures 18 months ago for July. Lets say for arguments sake they bought options for $40 a barrel. Those options are now worth, what $60? They can sell the options they don’t need, pocket the $20 a barrel and laugh all the way to the bank.
THAT is a big part of how Big oil is making huge profits. They arent really concerned with what oil costs today—they are concerned about getting the oil they need next year.
“A deep market with narrow spreads. You understand what that means?”
Lots of greedy hogs at the trough.