How do speculators make money
I would like to understand how speculators affect the price of crude oil. And indeed, the price of oil has dropped by almost 20 percent since I wrote that , in response to an e-mail here. But I should warn you: Who are the speculators?
Error (Forbidden)
Anyone who has bought or sold a commodities contract involving oil. Less demand means the price goes down. Speculators generally operate by buying either futures contracts or options.
With futures contracts, you lock in a price for a given date in the future and either get or owe the difference between that price and the actual price when the date arrives. If you have oil, you could keep it in the ground, waiting for the price to rise. If you believe speculation is part of the current story, this should be happening.
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How do speculators profit from options?
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Currency Speculation | Dollars & Sense
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