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Senior Contributor
Posts: 2,911
Registered: ‎08-11-2014
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Re: Why are traders scum?

Traders aren't that different than you and me. They are investers, speculators, gamblers farmers grain dealers and who ever might want to "play the market. Keep in mind that every time a transaction is done in the commodity markets there is an equal and opposite position established by by an opposing entity. You can't buy a contract without someone else selling on and vice versa..

 

Joe grain farmer is mad at specs when the market sells off and john cattle feeder is mad because specs drove the market higher. When if fact  neither have changed the price of corn with their transaction.

What changes the market is when willing sellers and willing buyers get out of balance. If you have no taker for your bid, you may have to bid more or less depending on your objectives.

 

News seems to be a big player in changing market direction. It is not neccessarally a change in supply demand but the anticipation of a change in supply demand. And the specs seem to respond to any new that might change that perspective.

 

One should remember that they aren't trading physical bushels. There simply aren't enough physical bushels to go around. They are trading promises. You promise to reverse your long or short position before it expires or promise to deliver or take delivery of the said amount of physical commodity. Which is ajoke if course because the market does not have the capasity to handle that number of deliveries.

 

Of course the real winners in all this is the exchange in that higher volumes produce more income . Comparable to the house reaping the profits in a casino. You might make money on your trade but the exchanges always makes money.

 

 

 

 

 

 

 

 

 

Senior Contributor
Posts: 235
Registered: ‎04-13-2013
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You are right idalivered

It is an extremely poor analogy.  Traders are just part of the system.  Is it perfect?  No.  It is what it is and if certain people don't like it they should find an occupation other than farming.  Are there some unscrupulous traders out there?  Most definitely, but to classify the entire lot of traders as scum is as ridiculous as many other things we have been treated to by MT in the past.

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Senior Advisor
Posts: 2,693
Registered: ‎11-02-2010

Re: Why are traders scum?

Everyone is still saying the same thing

Things are flawed and wrong but it's ok that traders openly do this. Just turn a blind eye and deal with it

Keep in mind with commodities you are legally able to go naked short and the float is whatever you want it to be and while there is always two sides to a transaction it's never a net zero sum because a bushel ultimately terminates when it gets used. Thus by design the whole dang system is flawed and can be manipulated by money flow. Thus it's no longer a market. It's a casino.

I guess I'm the only one that thinks this is wrong. Regardless of price.

FWIW. Local basis is quite good coming off a good sized crop. Tells me the board is disconnected from reality. Just like last year with a $2-$3 basis in beans.
Senior Advisor
Posts: 4,440
Registered: ‎06-19-2011
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Re: Why are traders scum?

Local basis is directly connected to our local supply/demand market.  If it wern't, would we even need anything other than the futures board?

Senior Advisor
Posts: 2,693
Registered: ‎11-02-2010
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Re: Why are traders scum?

Maybe we don't need a futures board?
Senior Advisor
Posts: 4,440
Registered: ‎06-19-2011
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Re: Why are traders scum?

If that were the case wouldn't places like the corn belt be screwed since that is where the abundance of the grain is located?  The futures board sets the table and local basis makes adjustments from that.  Once again, what am I missing?

Senior Advisor
Posts: 2,693
Registered: ‎11-02-2010
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Re: Why are traders scum?

Actually it would probably create competition and could increase prices.

Lotta grain moves outside the corn belt thus those users would bid bushels

Not to mention maybe we actually pay for surplus instead of punishing it
Senior Advisor
Posts: 4,440
Registered: ‎06-19-2011
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Re: Why are traders scum?

Sounds like a monopoly in the making.

Senior Advisor
Posts: 2,693
Registered: ‎11-02-2010
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Re: Why are traders scum?

Maybe

But there are a lot of players out there buying. Would take a lot of consolidation and integration.
Senior Advisor
Posts: 21,751
Registered: ‎05-13-2010
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Re: Why are traders scum?

Because they cheat. Look at the flash crash guy. They almost all do it, he just got a little too greedy.