Loading ...Briefly, re contracts isn’t it not right to let people sell what they don’t have, and buy contracts that they will not buy, because the “outsiders” “voting” the price for the actual consumers and actual producers.
Ans:
That’s a policy choice, not a technical necessity.
Futures markets allow hedging and price discovery, but they also allow speculation by non-producers and non-consumers, which can influence prices. Supporters say this adds liquidity and smoother pricing; critics argue it lets “paper traders” outvote real supply and demand.
So yes — it’s fair to say futures prices can be driven by participants who will never deliver or take delivery, and whether that’s “right” depends on how you weigh liquidity versus distortion.
Comment: So who drove Silver so high? The leveraged gamblers buying, or “voting” for higher prices?