Speculation not a major cause of commodity market volatility: FOA

Futures and Options Association report refutes negative impact of speculators on commodities markets

Anthony Belchambers - FOA
Anthony Belchambers, chief executive, Futures and Options Association

Speculators play a vital role in bearing risk and increase liquidity in commodity markets, and policy-makers should tread carefully when trying to restrain speculative trading as some actions could increase volatility, says a report commissioned by the Futures and Options Association (FOA).

The report, the impact of speculative trading in commodity markets, compiled by FTI Consulting (FTI), analysed 20 academic papers and found little evidence within the literature to suggest speculative trading

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