https://www.theice.com/insights/exchanges/why-financial-participants-matter-to-the-commodity-markets.
In that research paper, there was an equation mentioned. F=S+I+C. This equation ignores perceived changes to demand and supply in the future. So the equation should be like F=S+I+C+ Future Increase/(Decrease) in demand+Future Decrease/(Increase) in Supply
Political will for price controls seems to be on the rise and this is the type of communication that's needed to stem it.
True, in general, "speculators" (both humans and bots) do help with liquidity and price discovery, but consider what happened in ES futures today, soon after the release of CPI. Price shot up over 150 points in JUST 2 MINUTES!! That's just effed up, no matter how you slice it. So even though speculators are important part of market mechanism, they are also the cause for massive frenzy.
%% Exactly. Panic selling is also caused a lot by funds that have to sell\ redemptions force the selling. Certain exceptions apply. Carl Ichan, had no ''gate'' on his hedge fund in 2008\ but allowed for redemptions, got the money from another fund. Said he did not want to sell, just because of the herd
But specerlators were not the cause of the chaos. It never is with index futures. It was institutional algos. No human is sitting there with the thumb on the "BUY" button on their chart clicking large block orders at the instant the news is released. It takes the human brain a bit of time to process information, and no human brain can process the details of a report like that and in 5 seconds go "Yep, BUY 5000 lots!" Because those same specerlators would have gotten their asses handed to them when the market quickly reversed after the opening bell.
I don't have to re-read it. If you mean to say that "bots", i.e. institutional algos, are specerlators, I would say NO. They are calculating killing machines with a specific purpose.
So are the speculators. They're just as calculating and lethal, not to mention that they have a specific purpose. In fact, back in the 80s and 90s, that's all speculators did. They game the market to their advantage. But then you merely like to argue for the argument's sake, so I'll talk to a wall instead.
What kind of volume do you think retail traders are doing on the NYSE these days? The thing has half a billion shares per day. There's no way specerlators are having any effect on that. It's all the institutions which are doing it.