Samuel Cashiola

Speculators Bigger Players in Futures, Options Markets Than Thought

Speculation is part of any market and any good that is traded. Speculation often drives prices of everything from stocks to wine up or down. To take away speculation (or any other type of trading for that matter) would ensure that the underlying commodity will not be trading at intrinsic value. Intrinsic value should reflect total supply and demand forces.

You may not like that the price of oil (or any other commodity) is higher than it used to be but that doesn't mean that it does not reflect its current value.

Just like some people say these speculators are keeping the price of commodities like oil high, regulation would create a quasi-artificial price ceiling and keep the price lower.

Regulation is clearly not the answer if price integrity is your goal. (It certainly might be if all you want is a commodity like oil trading at a lower (and probably incorrect (in terms of intrinsic value)) price.