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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (13021)	5/1/2004 11:57:14 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

I'll bet the big funds use lots of leverage. When I buy commodities personally I just do a "50% margin" mental note, much like using margin for stocks. As you no doubt know, a one cent move in copper (25,000 lbs, or $30k at today's prices) is $250 per contract, and ten cent ($2,500) moves are common place, so you just adjust your risk. On specs: back in the very depressed commodity deflation days, you would regularly see the commercials getting long, and the specs were often short. In this kind of environment I would really be surprised to see specs flat or short at all. If they did I don't think it would last long. So I think one has to use this in context with the times (IMO inflationary). Most of the time COTs are noise, but big shifts like we've seen lately, are of considerable interest to me.