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The floor traders margin is different then yours. There is no big deal about a
couple of thousand contracts when you are a well capitalized floor trader in a
liquid pit. The specific individual I made reference to had nothing to worry
about for he knew that the rules could be changed and he was one of people who
voted to do it. Ira.
Dennis Conn wrote:
> Ira and all who know,
>
> I guess the term contract has an entirely different meaning in the futures
> markets than the definition I use. I'd have sworn they were binding in the
> real world - not in futures? Apparently, all contracts are created equal -
> but some are more equal than others! Now that I think about it, I guess that
> is the real world. How could I be so naive? I do have three questions
> though: If a floor trader who is a member is short 1000's of contracts from
> 10-40, and silver is at 50 and rising, what happened to all the margin calls
> that I assumed would have to be met? Is that another erroneous assumption on
> my part? Also, why would a floor trader hang on to such a losing position?
>
> Still stumped,
>
> Dennis C.
> dconn@xxxxxxxxx
> -----Original Message-----
> From: Ira <ist@xxxxxx>
> To: dconn@xxxxxxxxx <dconn@xxxxxxxxx>
> Cc: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Monday, March 01, 1999 19:05
> Subject: Re: beans, etc.
>
> >The simple reason is that futures are created and the ones that create them
> are
> >the members of the exchange, the floor traders. Now if you were a member
> and
> >short 1000's of silver contracts at between 10 and 40 and silver is trading
> at
> >50+ and everyone is still buying. What do you do if you run the exchange?
> You
> >say Ha, Ha, I just changed the rules, I don't have to go out and buy the
> silver
> >at 50 because I don't have to deliver it and the only place you can go to
> sell
> >your futures is to the exchange and here I am waiting. By the way, you
> have to
> >sell them at what I am willing to pay. Ira
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