If you are trading in the futures market and you don't have inside info or are not an actual supplier of the commodity, you are the sucker.

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spacebanana7 2 hours ago | parent | next [-]

To be fair, you could also be a real world user of a commodity and productively use futures markets. For example, an airline or trucking company using them to hedge fuel prices.

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nyeah 2 hours ago | parent [-]

Sure, and increasingly those people are being played for suckers. The article makes that point.

	▲	mothballed an hour ago \| parent [-]
		Less so than those buying it for spot? They need oil one way or another, whether from a future contract or the spot market (or downstream thereof).

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jimlawruk an hour ago | parent | prev | next [-]

Isn't there a 50% chance you are betting on the "insider" side of it?

	▲	adamandsteve 18 minutes ago \| parent [-]
		There's a <50% chance you'll make money off of it because it's zero-sum, and if insiders make money on average then other traders (i.e., you) have to lose money on average. The issue is that the odds aren't actually 50/50 on you buying either side of the trade; one half will look like a better deal (and given public information, it is a better deal) so you'll buy that half. Then when the market resolves, it'll turn out that insiders knew some piece of information that made the other half of the trade a better choice.

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otterley an hour ago | parent | prev | next [-]

That logic would also extend to individual stocks, wouldn’t it?

	▲	staplor an hour ago \| parent \| next [-]
		If you consider 'trading' to be short term buying and selling of stocks, then yeah. Holding stocks long term is nothing like trading commodities though.
	▲	SoftTalker an hour ago \| parent \| prev [-]
		I suppose if you're shorting or trading options generally, yes to some extent.

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cindyllm 2 hours ago | parent | prev [-]

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