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Why do "large traders" and "commercial hedge traders" seem to go opposite directions
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Why do "large traders" and "commercial hedge traders" seem to go opposite directions

  #11 (permalink)
Elite Member
Chicago, Illinois
Futures Experience: Advanced
Platform: NinjaTrader
Favorite Futures: ES, YM
Posts: 47 since Jan 2011
Thanks: 1 given, 72 received

Oh, and a random observation: Look at how the small traders don't ever really assume a large net position like the large traders. Now, my first guess is that is because the small traders aren't taking many longer term positions, and mainly day trade. But also, I think that smaller traders don't do as good of a job getting into and staying with trends, and that also shows here. If you're a ten lot trader, maybe try to use one of those lots to try and go with big trends (after simulating extensively, of course).

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  #12 (permalink)
Membership Temporarily Revoked
Calgary Alberta/Canada
Futures Experience: Advanced
Platform: TDWaterhouse
Favorite Futures: stocks (long term)
Posts: 934 since Feb 2014
Thanks: 180 given, 777 received

that makes sense to me...

I remember a long time ago as a new industrial salesman with a small company. I had a customer who wanted a price on a product to be valid 3 months from now if he gave us a purchase order now for a delivery 3 months months from now. It was a time when the US/CAD exchange rate wandered all over the place so I doubted we could do that...but when I broached the subject with my boss...he said that it was no problem if the order was given within 5 days...then he bought a futures contract based on the current exchange rate to protect himself...I thought that was pretty neat at the time....gave me another arrow in my sales quiver

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  #13 (permalink)
Trading Apprentice
Wheaton, MD
Futures Experience: Intermediate
Platform: R Trader
Favorite Futures: Futures
proman's Avatar
Posts: 9 since Mar 2014
Thanks: 0 given, 1 received

It's very simple: because commercial traders can sell only if hedger will agree to buy at that particular price, if the hedgers will want to buy at lower prices they'll move their buy limits lower & commercials will have to sell lower - and that's why the price will move down. The same works in opposite directions. Pure market!

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