Wednesday is a key trading day because it is the last day of the month, when traders price their portfolios.
Add the effect of speculation by commodities traders and price volatility is even greater.
FORBES: Four Steps to Improving Profits through Sustainability
The goal is to get in quickly, before others can analyze and react, and then sell into the strength created after ordinary traders and investors have reacted to the initial price move created by the traders, and have driven the price higher (or lower if the move is to the downside).
In the past, many would sell their produce to traders at whatever price was offered.
If grain traders rig the price of lysine they can go to jail.
Fresh positioning in the front month calls suggests some traders expect the price of the underlying to extend gains.
FORBES: Bears Devour Put Options On Plunging XLB, Call Buyers Hit Shufflemaster Jackpot
ISE's system will match orders at the midpoint of the National Best Bid and Offer, which is the current quote system traders use to price buy and sell orders.
Similarly the price traders have been willing to pay for the privilege of borrowing Netflix shares, another reliable proxy for the demand to sell short, has been climbing steadily since summer.
Futures traders are beginning to price in another -25bp cut.
FORBES: Euro Has Upside Here, But Beware The Tricks Of The Season
Shares recovered somewhat over the past week, and it looks like some options traders are betting the price of the underlying will likely hold up well over the next four weeks.
FORBES: Options Players Bet On New High For Target, Blue Coat Bulls Strike Out
Some stocks appeal to traders because of their price and volume action, while others appeal to investors who rely more on fundamental analysis: things like price-earnings ratios, sales growth, debt levels and the like.
The decline may also be prompting short selling from traders looking to profit from price dips, Grady said.
FORBES: Gold Futures Extend Declines On Forced Liquidation; Potential Support On Horizon
But traders still set the final price, and the process took six seconds.
Economic theory suggests that the future price is simply traders' best guess of the shape of things to come.
ECONOMIST: The price of oil is beyond $130 a barrel. Where will it stop?
In some cases, the deals also unfairly allow for personal gains by individual traders or cause bond-price distortions, they said.
Midpoint promises a price advantage to traders, since right now sell orders are done at the highest bid and buys are done at the lowest offer.
Most of the day gold prices had not strayed too far from unchanged price levels as traders are looking for fresh news to drive the market.
FORBES: P.M. Kitco Metals Roundup: Gold Sees Modest Uptick Following Fed's Beige Book
High-speed trading has made the financial world even more of a casino game, allowing traders to pick off minuscule price movements in just thousandths of a second.
Big prints in weekly calls on VLO in the early going this morning suggests some traders are positioning for the price of the underlying to extend gains in the near term.
If my basic premise is right, the declining price will force traders to sell their commodities contracts to raise the cash to raise the extra cash needed to satisfy the higher margin requirements.
FORBES: As Predicted in December, Commodity Bubble is Popping
Despite this poor price action, options traders are betting heavily that the IGN has formed a bottom.
Ray Holloway, of the Petrol Retailers Association, said the price squeeze meant independent traders faced losing out once again.
Despite the stock's strong price action, options traders are quite bearish toward RVBD.
Other price drags cited by traders included a sale recommendation on gold last week from Goldman Sachs Group Inc.
The up-tick rule, eliminated last July at the beginning of the market meltdown, forced traders to wait until a stock price ticked up before putting on a short sale.
And that price drop sends more traders into selling.
FORBES: As Predicted in December, Commodity Bubble is Popping
The other dinosaur den is financial options--the equivalent of the right, for example, to buy Treasury bond futures at a certain strike price--where traders hang over the railings, screaming and waving frantically.
Politicians, the press and traders betting on a sinking share price all seized on Mr Kozlowski's seemingly monstrous abuses of corporate expenses and Tyco's executive-loan scheme as proof of a wider accounting fraud at the firm.
The fact that some markets, including Wall Street's, recovered quickly suggests that the fall was based on short-lived copy-cat behaviour by traders worried by steep share-price drops in Hong Kong, rather than by important new information about the value of American shares.
On an exchange, a single order could move the market price, creating uncertainty for traders.
ECONOMIST: Derivatives: Over the counter, out of sight | The
应用推荐