so who should be excluded from the oil markets Smike? Who gets a quota and who doesnt? What decides how big your quota is?
Rules somewhat to this effect already exist (and have for many years in other commodities markets) For one, my understanding is the threshold of upfront capital for buying into the oil commodities is very low as compared to other commodities. Looking back at the mortgage industries we know how bad of situation that can create.
I'm not sure what you mean by people "motivated by fundamentals outside of said market"
Fundamentals of the oil market:
Oil price Hedging
Outside market influences:
The devaluation of the dollar
Massive influx of fund money into the oil market to hedge against bad investments. (The recent exit from the banking sectors)
Not saying these things could ever be independent from oil as free market is a sum of all of parts that all have some influence on one or another. But I feel that when you have a land slide of one into the other at such a dramatic rate, the market can not adapt as quickly and someone gets hung out to dry.
for sure, everyone trading oil, be they a producer, speculator, hedger, or end user, is motivated by market fundamentals
So the numbers look like this:
Historically, roughly 70% of market participants used exchanges for commercial purposes
. Today roughly 30% of market participants on the New York Mercantile Exchange (NYMEX) are identifiable hedgers with a legitimate business purpose
or they end up sitting on 1000 barrels of West Texas Intermediate crude!
God help me If I see congress in 2 yrs talking about an investor bail out on those holding oil future contracts that are turned into physical holding when deamand goes down. A lot of people are going to lose, as there is no way the oil market can sustain 260 billion. What goes up fast (in this case ultra fast) will come down just as fast.