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RE: CME Futures and Dealing With Volatility
Hi @reverseacid. Thanks for making me aware of the post.
The traditional markets are built on derivatives. And, as such are highly manipulated regardless of the amount of actual commodity in play.
While I would agree that there is definitely a relationship between these types of markets and price, it is not a positive one. If you look at the over-manipulated silver and gold markets, you can easily see that the price actions benefit the manipulators, not the market in general.
Many think the markets will crash at some point. That would be catastrophic. So, I'm thinking we must put up with these markets, but we must be very careful.
Thanks again for the heads up.
Very true @guysellars
Another way to see it is that derivatives aid price discovery. The perceived value changes so much, it always reflects the mean of investor value.
That being said, they do have huge drawbacks. But I believe they are useful tools when not used solely to disrupt the market
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