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To: rstrahan

I don’t understand how multiple “contract transfers” can drive the price in any net direction unless there is manipulation (i.e.painting the ticker) going on. Every contract has a winner and a loser seconds after the trade is made depending on whether the next tic was up or down.
While relaxing regulations(whatever that entailed) may correlate to rising prices, that doesn’t mean causation. Oil is generally fungible so if Akmed in Saudi Arabia or Snuffy in Oklahoma refuses to pump oil for his part of the $100/bl, then the price will go up till they turn the pump on. And the price includes delivery costs too no??? So what’s wrong with traders, acting on behalf of their customers, paying a higher price in return for a guaranteed supply? Isn’t that what futures are all about?


15 posted on 04/17/2012 6:15:30 AM PDT by bossmechanic (If all else fails, hit it with a hammer)
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To: bossmechanic
So what’s wrong with traders, acting on behalf of their customers, paying a higher price in return for a guaranteed supply? Isn’t that what futures are all about?

For one thing, they never have to take possession of the commodity, so they don't incur any costs of physical ownership.

18 posted on 04/17/2012 6:25:21 AM PDT by Hemingway's Ghost (Spirit of '75)
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