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06:17
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Originally posted by Stephan90:
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These changes make futures trading less attractive if you do it merely for price speculation (without the intent of taking or making delivery of the underlying asset e.g. lithium carbonate) because you need bigger price moves for your trade to become profitable. (You need to open & close your position later) If you open a position either long or short you pay 3.2 % of trade volume as a fee to the futures exchange and if you close that position later by doing the opposite trade again (because you want to speculate on the price but don't want to take or make phsyical delivery, which was the original purpose of why futures were invented in the first place) then you would need to pay an equal fee again. At least that is how I understand this announcement.
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Well that is good news as it would lead to less "paper" trading "speculators " and provide more accurate future prices which may be the reason for the continued fall in the China lithium spot price , so could lead to a quick turnaround and hence a short squeeze, thanks PTW
