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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: skinowski who wrote (102905)6/15/2008 6:26:11 PM
From: Paul Kern  Read Replies (2) of 206177
 
Commodities are different from stocks - every time a long position is opened, someone else MUST agree to take a short position to offset the long

Then, what happens if more long players want to buy positions than there are shorts willing to sell them? Do the long players bid up the limited number of available short positions?

Now, say you own an oil well and when futures prices are high you sell future short positions to lock in profits. But suddenly, the value of short positions is going up parabolically. Will you then withhold short positions because you want to wait for the price to go higher?
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