Markets and Fair Size

Discussion in 'Economics' started by libertad, Nov 10, 2008.

  1. http://online.wsj.com/article/SB122627663064812111.html

    One of the problems in the markets as has been demonstrated in the oil markets recently is based on one major issue....

    Size of Market


    The size of the market means that size of orders and positions have to be regulated ....because of mechanical trading aspects and price manipulation....

    This is a common sense, straightforward argument.

    If one chases what is normally a $500 million market with $1 billion in fast short term orders ....one can affect lower cost derivatives ...and further distort market pricing that does not constitute normal supply and demand....

    All securities should have position size limitations.....

    No exceptions....

    And if a market affects a public market in any way...it has to be regulated in the same manner....

    Normalcy is of paramount importance in order for markets to work as they are intended....