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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (50820)	6/8/2004 4:32:53 AM
From: energyplay	Read Replies (1) \| Respond to of 74559

The sellers might not be speculators, but oil producers who need hedges in place to get loans. Or could be an oil sands producer, who wants to lock in a selling price, then use the funds to buy futures on their suppplies (like naturla gas) locking in some of the profit for future years. The sellers could be speculators who bought futures at $24 about a year ago. Now they take the money out, and have use of it for the 10 years. Or closer to what this board likes to do, the sellers are speculators who will use the funds to buy royalty trusts, where you can buy a barrel for much less than $29... But I do believe there are some insane idiots, too ;-)

To: Seeker of Truth who wrote (50820)	6/8/2004 5:02:26 AM
From: rz	Read Replies (1) \| Respond to of 74559

>> "Okay, I'll lose a bit but I get to use the money from selling the futures for the next 6.5 years so that will be worth more than the loss. << You don't get any money up front by selling futures. As a matter of fact your broker will take small "good faith" deposit from you right away. Then, every night he will calculate your daily profit/loss and add/subtract the calculated amount to/from your account. Since you assume that the sellers are wrong then it means their loss will be subtracted from their account over time. >> I find insanity of market participants useful to study. << You can test your convictions and find level of sanity/insanity of others by buying these futures.