Boy, do you have the wrong impression of how futures work!!!
(From a professional futures trader),
Hans.
Bob wrote:
> I would say the opposite. Most pork belly futures contract owners do
> have the financial capability to take delivery. Say a single contract
> is worth USD 100,000. And the owner put down 5% to buy it. Where did
> the other USD 95,000 come from? The broker loaned it to the owner.
> Ya think the broker just goes around loaning those amounts to anybody?
> No. The owner of the contract had to put up collateral for the $95,000
The broker doesn't loan anybody anything!
Quote buster (is this needed anymore?)
> loan. As in house(s), buildings, horse(s), boat, stocks, and so on.
> Most futures contract owners have the ability to take over the lease
> in a silo or cold storage warehouse and buy the bellies. Or to buy one
> or more of each of the 500 stocks that make up the S&P 500.
> Practically speaking, futures derivatives work the opposite of
> e-gold. Almost all owners have the ability (assuming they were not
Quote buster.
> fraudulent with their broker) to excercise points in their
> derivative contract. I can't think of a derivative that does not
> work the opposite of e-gold.
>
> just like the case
> > of e-gold. In this case the "certain circumstances" are having
> > suitable cold storage facilities and an exceptionally large amount
> > of cash.
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