ABSTRACT
The importance of the futures markets in London can be gauged from some official estimates of the foreign earnings of all London's commodity markets. The speculator increases the turnover in the spot and futures markets and thereby smooths out price movements. But there are occasions when speculators, because of their strength and their conviction, can move the spot price or the futures price too far in one direction. Speculators, whatever the pressure from them, cannot add a permanent bias to prices, upwards or downwards, for at the point at which they decide to buy or sell their influence is immediately reversed. If they are right and make a profit, they act as stabilisers. If they are wrong and have to take a loss, they are certainly a bad influence on prices but are unlikely to remain in business, particularly as speculators.
