who determines amounts of futures contracts available for trade? and can new future contracts be added and removed?
this question shows a lack of understanding of the nature/structure of futures markets. futures are created (literally) out of thin air. they are merely agreements. that's why they are called "contracts" and not "shares" for example. all they are is (legally binding) agreements. all you need to create a contract is two people - one for each "side" GOOGLE "cot report"
Someone else bought your contract thinking that the price of the commodity would go up. ~ It really depends on how the futures contract is settled. Some require delivery others don't. Read up on it. Check the exchange for a contract you want to trade; there will be more than enough information there.
The reason I ask is because in stocks, what cause the price to go up and down is caused by a LIMITED supply of stocks with consideration of price and demand. but in future contracts, if I short a futures contract or buy a futures contract... say ES... if I'm literatelly created a contract out of the blue... then what motivates price movement in futures if there is an ENDLESS supply of future contracts that can be created?
Hehe, I don't even trade futures and I know this one. If there is a lot of demand at a certain price, why would the sellers create contracts to sell there? Couldn't they SELL HIGHER?? And profit more? Couldn't the buyers buy lower? You don't need a fixed amount of something to create a market... supply and demand works differently. Maybe I'm terrible at explaining this though. lol
Who creates these contracts? Is it the buyers and sellers or is it the farmers/producers of the commodity? If someone could clear things up...I guess I had a misunderstand that needs to be cleared up...basically what you are saying is that when I buy a contract and then sell it...I have not created a contract... it seems to me the creator of the commodity creates the amount of contracts they want to... If its the farms/producers that creates the amount of contracts in say pot belly contracts, then who creates and decides how many index futures contracts there are such as the ES and YM?
Is you name Borrat? How is your sister at making sex in mouth? I hear she is good... When she makes a proposition she is long, and your cousin is short. Do you get it?