[dirtboy]

Crude Oil Futures have been traded on the NYMEX since 1983.

NYMEX has transparency and will enforce position limits where mandated (aka Amaranth). ICE has neither. That is the entire problem.

And given you only need to put up about 8 percent on margin for commodities futures, you can leverage the bejabbers out of any cash you put in.

[SAJ]

That's half the problem. The other half of the short-term problem is the skirting of ERISA rules by pension funds and endowments, with the connivance of investment banks, in order to build up effectively unlimited long positions via the now-infamous ''swaps exemption''.

About 1.2 billion bbls of completely artificial ''demand'' involved in this little scheme right now.

[waverna]

>>given you only need to put up about 8 percent on margin for commodities futures, you can leverage the bejabbers out of any cash you put in. <<

That 8% leverage sounds great when price is rising, but it magnifies losses as well as gains. Speculators can lose much more than their original investment. Since the risk is so great, it is more prudent to speculate based upon actual fundamentals. One wrong guess and you’re out of business.

That’s why you see hedge funds disappear overnight.