Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Rummenigge
"Then there’s those trading the options to buy on a certain date on a certain price. These guys make the most of the money nowadays - it’s not soy that is to rare or biofuel that uses to much soy - it’s the high price for derivative contracts - and that’s an indirect result of the cheap dollar."

Not true. There are those that speculate with futures contracts, but every buyer has a seller, and every seller a buyer. Unless you can actually make delivery or take delivery of soy beans, you must clear your speculative position before the contract date. It is a zero sum game for speculators. They keep the market price fluid, but cannot really change the overall price--that is all supply and demand driven. Cheap dollar also has no impact. Where in the world did you get such strange ideas about the commodity markets?

10 posted on 01/18/2008 3:01:03 AM PST by johnandrhonda (have you hugged your banjo today?)
[ Post Reply | Private Reply | To 4 | View Replies ]


To: johnandrhonda

Future trades are certainly not zero sum. There’s always a spread.

There is more volume in calls then in put option - these are really executed and create a lot of demand at a certain time. As you say you have to clear it - buy actually buying.

What was ment as a price ensurance drives demand. Not the real demand.


17 posted on 01/18/2008 7:18:12 AM PST by Rummenigge (there are people willing to blow out the light because it casts a shadow)
[ Post Reply | Private Reply | To 10 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson