|
| Love it or Hate it the CBOT is a price discovery mechanisim. This is used by both Hedgers, the ones that handel, use and produce a commodity and speculators, one that takes a position with-out ever having the intention of owning or selling the physical. The market needs both. The "spec" can drive the price up and the "long" will be happy and the "short" will be mad and vice versa. If you are a producer with unsold/priced grain you are "long" the commodity. That includes the crop that is just planted. If you are a buyer that has not purchased your needs you are a "short". (if you need it and dont have it you are short) The market is priced right as of today since the settlement price is what both buyer and seller have agreed upon. This will probably change tommarow, and the next day and so on. Yes there are many times the market leaves you scrathing your head but if someone has a better way of price discovery then let me know. | |
|
market prices - are they priced right?
