All of you on here are just posting your ad hoc reckons with no understanding of the derivative markets. Mitchell and Webb already did a sketch on this where they ask you to send in your 'reckons' so they can be read on a respected news netwrok - and you are all the butt of the joke.
Most of you really have no idea of why futures/forwards trading is necessary. It is key for increasing firm value in financially constrained firms, heding volatility in the spot markets, finding the prices in spot markets and many other things. To say that it's just for speculators is nonsense. To say 80% of futures trades make money is nonsense - there are two parties involved so it's a 50-50 split in profits. Hedgers are happy to loose money if it means reduced volatility of supply costs.Fools
@MichaelOrr1984 To call others 'Fools' when you don't know the difference between 'loose' and 'lose' is classic.
Also to claim that futures trading is more than speculating is ridiculous. By the very name 'Future(s)' it is indicating they are trading on what they perceive to be the future price of a commodity. In other words, they are speculating on what the price of a commodity *will* be some time in the future. Typically, they speculate the price will go up or down for negative reasons.
@aboothunitedstates OK I'll start proving you wrong now so that you know how dumb you are. Futures/forwards markets are for arbitragers, hedgers AND speculators. There are rules to prevent speculators from bastaradising the price. The spot price is actually often found within the futures market because it's more liquid. Backwardation and Contango are determined in part by hedgers who you have completely left out. Your 'negative reasons' statement is not correct either...
@MichaelOrr1984 ...there are many reasons why but a very obvious one for you is that there are two people in a futures trade. One think and price is going up and the other down. So by definition 50% of the people are doing it for 'negative reasons' and the other 50% are for 'positive reasons'. There are also highly complicated arguments about how speculators, even if they are all 'negative' still help in finding the 'true' price and are therefore of value.
@MichaelOrr1984 If you are right, then all of the academics are wrong and you could probably make billions of pounds from your great insight.....why aren't you doing that again?
@MichaelOrr1984 You just made a bunch of junk up there. "All the academics"? Please.
I also stated; knowing how Futures traders work, does not indicate which option to acquire, which is where the money is made.
Just because a jobber tells you the price will go up, doesn't mean smart money will not start profit taking before the bubble bursts, leaving you with an overpriced option.
@aboothunitedstates Oh well. There's a paper from the 80's when future markets were new which discussed the merits of whether or not we should have them. It might be of interest to you.
@MichaelOrr1984 Simply not true. Sometimes with commodities like gold and oil, in a negative market it is buy buy buy. The only selling is profit taking, 'til the bubble bursts then some sucker holds stock and options that have devalued.
@MichaelOrr1984 Well done. You Googled a few buzzwords that aren't unique to trading futures, in order to cobble together a meaningless 'reckon'. You stated nothing about how futures trading has any value or how it stabilizes commodities prices.
An option (as in option to buy) is a contract to buy a commodity in future at a fixed price. Using an airline as an example; this enables them to plan ahead with flight prices based on the fuel they'll need ... continued
@aboothunitedstates They arrange a contract with a provider to, say buy $90 million worth of aviation fuel at current market prices, for $100 million. They can therefore have a stable price at the time the option matures. Some financial institutions create these options with no intention of keeping them to maturity. Futures traders take these option and trade them like a commodity of their own (like how junk bonds used to be traded).
@aboothunitedstates The value of them will be determined by speculating the price of aviation fuel will rise above $100 million for this amount of fuel, thereby making a significant cost saving by owning the option.
So any stability is obtained by the owner using the option. As far as the price of aviation fuel goes, anyone trading an option in that commodity is trying to drive the price up, so no stability there.
@aboothunitedstates Also, Iran closing the straits of Hormuz would see no benefit to stability from futures. Oil would simply sky rocket, even where Middle eastern oil is not used as the oil grade is not adequate. This is because the speculators use negativity in any form to drive up prices where they can establish a link. They also use positive news for negative purposes, such as economic growth causing increased demand, so prices rise again.
@MichaelOrr1984 Futures markets are not key in achieving anything. Without these markets, other markets and price fluctuations would continue as now. Do you think the value of a traded option on oil really stabilizes the price of oil? It only provides stability for a company wishing to use the option, like an airline. That said, they might not want the option if it costs more than the market value, so bought something that turned out worthless.
@aboothunitedstates What traded options really do is create a promise note/contract based on price speculation, not the value of a tangible asset like company stock or commodities themselves. There's no value in a traded option on oil if the speculation is that oil prices will fall below the option value. Where's the stabilizing factor in that? It will devalue the option and send the oil price down anyway and the certificate holder will lose (or should that be 'loose') their investment.
@aboothunitedstates You wrote, "Futures markets are not key in achieving anything" To answer: Futures markets find the price within the spot market and are vital due to increased liquidity. It also helps increase firm value. These are all HUGE benefits.....so that would make your statement incorrect. If you are really interested in this I can give you links to online academic papers which will prove you wrong on everything you have said.
I really don't get this. Obviously futures trading is a mutually beneficial transaction otherwise one of the parties wouldn't be involved. If futures trading didn't benefit anyone then no one would participate and no one would make money. There's no reason to extract some higher, church-ish morality from it. BTW: about 80% of futures trading ends up losing money.
@templarart And I think you answered your own question just there. 100% of future traders get together, in the hope of being in the 20% that make money, after which 80% lose money and 20% win. Now the real problems start when not just the 80% gamblers who lost lose out, but also their employees of various natures. So the question: "Who does it help?" is fair: obviously someone benefits, and we know who, namely the 20% - but taking money from 80% and giving to 20% is not like being a fireman...
@questionwhatyouhear Yes, future's trading is a gamble but it is almost entirely the domain of individuals rather than corporations so employees don't come into play. So what if even 99.99% lose money? That would be the percentage of people thinking they'd make money publishing a novel - is it fair that only .01% make money with a novel? Life isn't fair. The 20% don't get the 80%'s money; Someone playing blackjack isn't getting what you bet - they're different bets with different results..
@questionwhatyouhear I'm not trying to sound patronising but if you really wish to understand this and the reasons why you are completely wrong then read john hull's book on options and any research papers on the internet regarding the importance of hedinging and liquidity.
@templarart at inception, futures contract are price to give a zero sum gain to either party and so both parties are happy to enter the contract. As the spot and futures price change over time, one party ends up in profit. so 50% of trades make money, not 80%
@MichaelOrr1984 I was referring to futures trading as a long term financial strategy. I've read several books on investing and it's pretty much a given that futures trading is more like a gamble than an investment which doesn't make it immoral or valueless - it's just very risky. There was an Heironymous study in 1969 for example that showed only 1/3rd of futures traders made money - I know of another more recent study that showed 20% but I can't find that one right now.
instead of future trading, why don't they give them the money and say 10% of profits plus the original "loan". That way they have a stake in the company success & could perhaps use their so called intelligence to help the farmer or whatever turn a profit. Future trading & other financial products/services only work to remove money from the people that actually create things & reward those that are cunning enough to exploit others needs/desires. Marketing & advertising warp peoples aspirations.
@aldojbc If future trading doesn't benefit primary producers, why do they sell futures? There's nothing to say they have to. The prices are still determined by the same market forces. It just allows them to eliminate risk. Someone else may gain or lose money by taking on that risk, and that is the chance they take. In many cases it's a situation of mutual benefit where the risk associated with purchasing futures is complementary to the risk profile of an investor's portfolio.
@aldojbc I'm afraid this just isn't true. I supsect you won't do any reading on this at all but your views are not supported by the thousands of extremely gifted professors and researchers who study this market at the top level in an entirely subjective way. Finance is a social science. You might not like the people who work in the markets, but the markets themselves are entirely sound.
lol they class it as betting , same for all you property speculators who have 10 -20 properties hoping oh sorry speculating that property will keep rising and you can sell it for a (PROFIT) ring any bells !! no different to trading in index futures corn soya gold property all the same its a market !!!! what goes up as always must come down from 97-2007 housing had a massive boom massive inflated price for four walls, its caught all the retail buyers ( the retail monkeys) at the top good luck
@minimacca999 not really object i don't really think it's my place or right too object. I was just pointing it out because if someone made sketch going on about how brilliant making lots of money is and about how big companies have every right too there'd be hell to pay.
I really enjoy the 'socialist' comments or the 'as if it were my job to help anyone' comments; when did we get like this, America? When did we decided that being greedy was a knack and that 'anything goes' was a good way to live a life - just because you can do something, like steal from people or convince them to gamble their lives away in the stock market so that you can not work and still make a lot of cash, doesn't mean you should.
-because for the farmer to protect his/her livelihood and hedge against prices going down, somebody has to provide liquidity and bet the opposite way. And these people of course are the much hated speculators.
The problem is that, theory aside, I am ALMOST sure that most of the financial world these days are just speculators, rather than people genuinely wishing to invest or investing because it has something to do with their field.
Just to address some of the populist anger here, futures trading is theoretically important primarily as it helps people lessen the risk of their life's work.
For example, the farmer will hedge against the price of corn, if say, some new disease is found in corn and all market demand disappears. That way he/she protects himself/herself from natural disasters and other things beyond their control, so it's insurance.
WHERE IT GETS morally iffy is that the other side of the equation-
Futures traders over inflate prices, because it's all about speculating that prices will go one way or the other. It's all about what they collectively believe, not what is real. They all speculate the price of oil goes up, because it's safer to be pessimistic and sure enough, oil prices rise, without any cause, other than futures traders all talk each other into believing it will. They get money on the inevitable rise whilst Joe Public pays more at the pump for no good reason.
true that, but you're also oversimplifying it. futures = commodities. unlike say, stocks, they do in fact have intrinsic value. you can take that oil and put it in a car.
what traders do is speculate on predicted supply and demand, which generally changes irregardless of futures traders (except for a few things like precious metals) and is more affected by things like war in iraq/libiya that affect supply.
@donjulioanejo Of course they base their speculation on attributes that affect the potential supply and demand, but what makes futures traders bad for the world economy, is they predict negatively on anything and everything, especially where oil price is concerned. Example: The Libyan conflict reduces supply to European markets, so it is assumed that Europe will take demand from other sources, so other markets that do not use Libyan oil go up as well.
Then OPEC increases output to offset Libyan reduced output and this is largely ignored.
The Japanese earthquake also made oil prices rise, although there's no reason to as Japan is a consumer, not a producer. You would think that oil demand would decrease in Japan due to the damage to the industry there, but instead it went up because some speculators come up with a whacky theory on why it could cause more oil supply issues. Speculators are economic parasites.
@aboothunitedstates but to take your particular example, it would still happen without any traders, except that it would be either spread out over a longer period (i.e. prices for oil rising over the decades as less and less remains), or happen abruptly (i.e. Libya is at war => supply decreases => prices jump up). Commodities trading serves as a buffer against this.
Also, you can make money irregardless of which direction the market goes. You just have to predict accurately.
@aboothunitedstates you have a very strong opinion. Either you are wrong and have founded this on zero knowledge which makes you an idiot. Or you are right and sitting on a trillion dollar secret which has alluded the brightest minds within financial and mathematical research for generations, which would also make you an idiot. Well done.
@MichaelOrr1984 I think there's more than 2 conclusions, 1 of them being you're a dick for responding like a dick with no other opinion than to throw an insult, that confirms your dick like status. This, especially when it's no secret that traders, trade future options (futures) based on what they think will happen. You don't make a $trillion knowing this; you make a $trillion buying an option to acquire commodities at say $10 per unit that's worth $11 dollars per unit when the option matures.
@MichaelOrr1984 You also make money convincing someone else the options you hold will be more valuable than they are, effectively, a confidence trick.
@aboothunitedstates Wow. That sentence shows that you know nothing. Maybe you should form an opinion once you've done some reading. You can start with regualtion - try the conduct of business sourcebook first.
Futures traders do provide a sort of value, namely they tend to keep the market more stable so we don't have huge upswings and downswings, with for example oil costing $20 a barrel one day and $200 a barrel the next.
how does it help.
shatterjack 3 weeks ago
All of you on here are just posting your ad hoc reckons with no understanding of the derivative markets. Mitchell and Webb already did a sketch on this where they ask you to send in your 'reckons' so they can be read on a respected news netwrok - and you are all the butt of the joke.
MichaelOrr1984 1 month ago
Most of you really have no idea of why futures/forwards trading is necessary. It is key for increasing firm value in financially constrained firms, heding volatility in the spot markets, finding the prices in spot markets and many other things. To say that it's just for speculators is nonsense. To say 80% of futures trades make money is nonsense - there are two parties involved so it's a 50-50 split in profits. Hedgers are happy to loose money if it means reduced volatility of supply costs.Fools
MichaelOrr1984 1 month ago
@MichaelOrr1984 To call others 'Fools' when you don't know the difference between 'loose' and 'lose' is classic.
Also to claim that futures trading is more than speculating is ridiculous. By the very name 'Future(s)' it is indicating they are trading on what they perceive to be the future price of a commodity. In other words, they are speculating on what the price of a commodity *will* be some time in the future. Typically, they speculate the price will go up or down for negative reasons.
aboothunitedstates 1 month ago
@aboothunitedstates OK I'll start proving you wrong now so that you know how dumb you are. Futures/forwards markets are for arbitragers, hedgers AND speculators. There are rules to prevent speculators from bastaradising the price. The spot price is actually often found within the futures market because it's more liquid. Backwardation and Contango are determined in part by hedgers who you have completely left out. Your 'negative reasons' statement is not correct either...
MichaelOrr1984 1 month ago
@MichaelOrr1984 ...there are many reasons why but a very obvious one for you is that there are two people in a futures trade. One think and price is going up and the other down. So by definition 50% of the people are doing it for 'negative reasons' and the other 50% are for 'positive reasons'. There are also highly complicated arguments about how speculators, even if they are all 'negative' still help in finding the 'true' price and are therefore of value.
MichaelOrr1984 1 month ago
@MichaelOrr1984 If you are right, then all of the academics are wrong and you could probably make billions of pounds from your great insight.....why aren't you doing that again?
MichaelOrr1984 1 month ago
@MichaelOrr1984 You just made a bunch of junk up there. "All the academics"? Please.
I also stated; knowing how Futures traders work, does not indicate which option to acquire, which is where the money is made.
Just because a jobber tells you the price will go up, doesn't mean smart money will not start profit taking before the bubble bursts, leaving you with an overpriced option.
Futures trading is still gambling.
aboothunitedstates 1 month ago
@aboothunitedstates Oh well. There's a paper from the 80's when future markets were new which discussed the merits of whether or not we should have them. It might be of interest to you.
MichaelOrr1984 1 month ago
@MichaelOrr1984 Simply not true. Sometimes with commodities like gold and oil, in a negative market it is buy buy buy. The only selling is profit taking, 'til the bubble bursts then some sucker holds stock and options that have devalued.
aboothunitedstates 1 month ago
@MichaelOrr1984 Well done. You Googled a few buzzwords that aren't unique to trading futures, in order to cobble together a meaningless 'reckon'. You stated nothing about how futures trading has any value or how it stabilizes commodities prices.
An option (as in option to buy) is a contract to buy a commodity in future at a fixed price. Using an airline as an example; this enables them to plan ahead with flight prices based on the fuel they'll need ... continued
aboothunitedstates 1 month ago
@aboothunitedstates They arrange a contract with a provider to, say buy $90 million worth of aviation fuel at current market prices, for $100 million. They can therefore have a stable price at the time the option matures. Some financial institutions create these options with no intention of keeping them to maturity. Futures traders take these option and trade them like a commodity of their own (like how junk bonds used to be traded).
... continued
aboothunitedstates 1 month ago
@aboothunitedstates The value of them will be determined by speculating the price of aviation fuel will rise above $100 million for this amount of fuel, thereby making a significant cost saving by owning the option.
So any stability is obtained by the owner using the option. As far as the price of aviation fuel goes, anyone trading an option in that commodity is trying to drive the price up, so no stability there.
... cont.
aboothunitedstates 1 month ago
@aboothunitedstates Also, Iran closing the straits of Hormuz would see no benefit to stability from futures. Oil would simply sky rocket, even where Middle eastern oil is not used as the oil grade is not adequate. This is because the speculators use negativity in any form to drive up prices where they can establish a link. They also use positive news for negative purposes, such as economic growth causing increased demand, so prices rise again.
Now go find some more buzzwords!
aboothunitedstates 1 month ago
@MichaelOrr1984 Futures markets are not key in achieving anything. Without these markets, other markets and price fluctuations would continue as now. Do you think the value of a traded option on oil really stabilizes the price of oil? It only provides stability for a company wishing to use the option, like an airline. That said, they might not want the option if it costs more than the market value, so bought something that turned out worthless.
aboothunitedstates 1 month ago
Comment removed
aboothunitedstates 1 month ago
@aboothunitedstates What traded options really do is create a promise note/contract based on price speculation, not the value of a tangible asset like company stock or commodities themselves. There's no value in a traded option on oil if the speculation is that oil prices will fall below the option value. Where's the stabilizing factor in that? It will devalue the option and send the oil price down anyway and the certificate holder will lose (or should that be 'loose') their investment.
aboothunitedstates 1 month ago
@aboothunitedstates You wrote, "Futures markets are not key in achieving anything" To answer: Futures markets find the price within the spot market and are vital due to increased liquidity. It also helps increase firm value. These are all HUGE benefits.....so that would make your statement incorrect. If you are really interested in this I can give you links to online academic papers which will prove you wrong on everything you have said.
MichaelOrr1984 1 month ago
I really don't get this. Obviously futures trading is a mutually beneficial transaction otherwise one of the parties wouldn't be involved. If futures trading didn't benefit anyone then no one would participate and no one would make money. There's no reason to extract some higher, church-ish morality from it. BTW: about 80% of futures trading ends up losing money.
templarart 5 months ago
@templarart And I think you answered your own question just there. 100% of future traders get together, in the hope of being in the 20% that make money, after which 80% lose money and 20% win. Now the real problems start when not just the 80% gamblers who lost lose out, but also their employees of various natures. So the question: "Who does it help?" is fair: obviously someone benefits, and we know who, namely the 20% - but taking money from 80% and giving to 20% is not like being a fireman...
questionwhatyouhear 1 month ago
@questionwhatyouhear Yes, future's trading is a gamble but it is almost entirely the domain of individuals rather than corporations so employees don't come into play. So what if even 99.99% lose money? That would be the percentage of people thinking they'd make money publishing a novel - is it fair that only .01% make money with a novel? Life isn't fair. The 20% don't get the 80%'s money; Someone playing blackjack isn't getting what you bet - they're different bets with different results..
templarart 1 month ago
@questionwhatyouhear I'm not trying to sound patronising but if you really wish to understand this and the reasons why you are completely wrong then read john hull's book on options and any research papers on the internet regarding the importance of hedinging and liquidity.
MichaelOrr1984 1 month ago
@MichaelOrr1984 *hedging
MichaelOrr1984 1 month ago
@templarart at inception, futures contract are price to give a zero sum gain to either party and so both parties are happy to enter the contract. As the spot and futures price change over time, one party ends up in profit. so 50% of trades make money, not 80%
MichaelOrr1984 1 month ago
@MichaelOrr1984 I was referring to futures trading as a long term financial strategy. I've read several books on investing and it's pretty much a given that futures trading is more like a gamble than an investment which doesn't make it immoral or valueless - it's just very risky. There was an Heironymous study in 1969 for example that showed only 1/3rd of futures traders made money - I know of another more recent study that showed 20% but I can't find that one right now.
templarart 1 month ago
instead of future trading, why don't they give them the money and say 10% of profits plus the original "loan". That way they have a stake in the company success & could perhaps use their so called intelligence to help the farmer or whatever turn a profit. Future trading & other financial products/services only work to remove money from the people that actually create things & reward those that are cunning enough to exploit others needs/desires. Marketing & advertising warp peoples aspirations.
aldojbc 6 months ago
@aldojbc If future trading doesn't benefit primary producers, why do they sell futures? There's nothing to say they have to. The prices are still determined by the same market forces. It just allows them to eliminate risk. Someone else may gain or lose money by taking on that risk, and that is the chance they take. In many cases it's a situation of mutual benefit where the risk associated with purchasing futures is complementary to the risk profile of an investor's portfolio.
Mudget86 6 months ago
@aldojbc I'm afraid this just isn't true. I supsect you won't do any reading on this at all but your views are not supported by the thousands of extremely gifted professors and researchers who study this market at the top level in an entirely subjective way. Finance is a social science. You might not like the people who work in the markets, but the markets themselves are entirely sound.
MichaelOrr1984 1 month ago
@TheAremo they also cause the unnecissary inflation in the price of necessary goods, but I see your point. I was kinda angry when I wrote that.
ivarsig 7 months ago
@ivarsig what is your argument behind this? Is it based on any economic theory?
MichaelOrr1984 1 month ago
I hope they took the third party insurance for those biscuits their offering...
Xenotric 8 months ago
Futures traders, fucking scum of the earth. The only career I can't think of anyway to justify.
ivarsig 8 months ago 3
I enjoyed this, good work! Thanks for putting it up :)
ANFTAMMI4EVER 9 months ago
I'm Colombian an i find this kind of humor simply brilliant, where is the best humor in the world come from?
spartanpredeterminad 10 months ago
@spartanpredeterminad the best humour in the world comes from Britain (I'm not from the UK)
higfny 9 months ago 2
lol they class it as betting , same for all you property speculators who have 10 -20 properties hoping oh sorry speculating that property will keep rising and you can sell it for a (PROFIT) ring any bells !! no different to trading in index futures corn soya gold property all the same its a market !!!! what goes up as always must come down from 97-2007 housing had a massive boom massive inflated price for four walls, its caught all the retail buyers ( the retail monkeys) at the top good luck
benjiheads 1 year ago
@minimacca999 not really object i don't really think it's my place or right too object. I was just pointing it out because if someone made sketch going on about how brilliant making lots of money is and about how big companies have every right too there'd be hell to pay.
255ad 1 year ago
I really enjoy the 'socialist' comments or the 'as if it were my job to help anyone' comments; when did we get like this, America? When did we decided that being greedy was a knack and that 'anything goes' was a good way to live a life - just because you can do something, like steal from people or convince them to gamble their lives away in the stock market so that you can not work and still make a lot of cash, doesn't mean you should.
hanksingle 1 year ago
I can't help but sense slight socialist over tones in this sketch
255ad 1 year ago
@255ad not really, its just pointing out that futures trading is exploiting the capitalist system...i think :D
chump177 1 year ago
@chump177 I meant in the way they go on about the way job's should "help" as if you've got something to pay back to society
255ad 1 year ago
@chump177 not true i'm afraid. To quote mitchell and webb, this is your 'ad hoc reckon'.
MichaelOrr1984 1 month ago
What program did you animate it in? Funny BTW :P
iPhoneGTI 1 year ago
@iPhoneGTI Thanks, it was done in Adobe After Effects (it was a very quick job, though.)
SirBoho 1 year ago
-because for the farmer to protect his/her livelihood and hedge against prices going down, somebody has to provide liquidity and bet the opposite way. And these people of course are the much hated speculators.
The problem is that, theory aside, I am ALMOST sure that most of the financial world these days are just speculators, rather than people genuinely wishing to invest or investing because it has something to do with their field.
crazedmongoose2003 1 year ago
Just to address some of the populist anger here, futures trading is theoretically important primarily as it helps people lessen the risk of their life's work.
For example, the farmer will hedge against the price of corn, if say, some new disease is found in corn and all market demand disappears. That way he/she protects himself/herself from natural disasters and other things beyond their control, so it's insurance.
WHERE IT GETS morally iffy is that the other side of the equation-
crazedmongoose2003 1 year ago
@crazedmongoose2003 How many farmers do you know who do this? I believe most of this is done by Quants firms.
pgunn01 1 year ago
@pgunn01 Yep, if you look at my follow up comment I fully acknowledge that it's mostly speculators who do this and not people with actual stakes.
crazedmongoose2003 8 months ago
This is one of my all time favourite sketches :) And all the other jobs they do... :D
thelevellers 1 year ago
Futures traders over inflate prices, because it's all about speculating that prices will go one way or the other. It's all about what they collectively believe, not what is real. They all speculate the price of oil goes up, because it's safer to be pessimistic and sure enough, oil prices rise, without any cause, other than futures traders all talk each other into believing it will. They get money on the inevitable rise whilst Joe Public pays more at the pump for no good reason.
aboothunitedstates 2 years ago
Joe Public? that Joe the Plumber's cousin twice removed? Auntie Sally-Sue's third son wasn't it? Ah yes I know him, I do! Yeah he's fed up, he is!
lefredvoncarstein 1 year ago
@aboothunitedstates
true that, but you're also oversimplifying it. futures = commodities. unlike say, stocks, they do in fact have intrinsic value. you can take that oil and put it in a car.
what traders do is speculate on predicted supply and demand, which generally changes irregardless of futures traders (except for a few things like precious metals) and is more affected by things like war in iraq/libiya that affect supply.
donjulioanejo 11 months ago
@donjulioanejo Of course they base their speculation on attributes that affect the potential supply and demand, but what makes futures traders bad for the world economy, is they predict negatively on anything and everything, especially where oil price is concerned. Example: The Libyan conflict reduces supply to European markets, so it is assumed that Europe will take demand from other sources, so other markets that do not use Libyan oil go up as well.
aboothunitedstates 11 months ago
@donjulioanejo
Then OPEC increases output to offset Libyan reduced output and this is largely ignored.
The Japanese earthquake also made oil prices rise, although there's no reason to as Japan is a consumer, not a producer. You would think that oil demand would decrease in Japan due to the damage to the industry there, but instead it went up because some speculators come up with a whacky theory on why it could cause more oil supply issues. Speculators are economic parasites.
aboothunitedstates 11 months ago
@aboothunitedstates but to take your particular example, it would still happen without any traders, except that it would be either spread out over a longer period (i.e. prices for oil rising over the decades as less and less remains), or happen abruptly (i.e. Libya is at war => supply decreases => prices jump up). Commodities trading serves as a buffer against this.
Also, you can make money irregardless of which direction the market goes. You just have to predict accurately.
donjulioanejo 11 months ago
@donjulioanejo You know irregardless doesn't make any sense right? It is simply regardless. Regardless of what you say you will be wrong.
TheDuerden 10 months ago
@aboothunitedstates you have a very strong opinion. Either you are wrong and have founded this on zero knowledge which makes you an idiot. Or you are right and sitting on a trillion dollar secret which has alluded the brightest minds within financial and mathematical research for generations, which would also make you an idiot. Well done.
MichaelOrr1984 1 month ago
@MichaelOrr1984 I think there's more than 2 conclusions, 1 of them being you're a dick for responding like a dick with no other opinion than to throw an insult, that confirms your dick like status. This, especially when it's no secret that traders, trade future options (futures) based on what they think will happen. You don't make a $trillion knowing this; you make a $trillion buying an option to acquire commodities at say $10 per unit that's worth $11 dollars per unit when the option matures.
aboothunitedstates 1 month ago
@MichaelOrr1984 You also make money convincing someone else the options you hold will be more valuable than they are, effectively, a confidence trick.
Dick!
aboothunitedstates 1 month ago
@aboothunitedstates Wow. That sentence shows that you know nothing. Maybe you should form an opinion once you've done some reading. You can start with regualtion - try the conduct of business sourcebook first.
MichaelOrr1984 1 month ago
Comment removed
aboothunitedstates 1 month ago
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@MichaelOrr1984 @MichaelOrr1984 Wow, I mean really wow, like ... dude WOW! This is such a 'wow' conversation, I just think ... WOW! Moron.
You're pretty useful at trying to inform others they know nothing, but more interesting and revealing is; that's all you contribute.
And finally, WOW!
aboothunitedstates 1 month ago
Futures traders do provide a sort of value, namely they tend to keep the market more stable so we don't have huge upswings and downswings, with for example oil costing $20 a barrel one day and $200 a barrel the next.
borrofburi 2 years ago
i fucking hate futures traders
WKaliberr 2 years ago
oooooo fancy!
BrightBlackBanana 2 years ago 9
I'll admit it's not the best animation.
SirBoho 2 years ago 2
oh, believe me, it is!
BrightBlackBanana 2 years ago 12