A note holder may derisk through the exchange and rollover the...

A note holder may derisk through the exchange and rollover the contract or take up another derivative like an index option where the third Friday of the expiry month becomes important. Like the Friday witch! This opens up a whole new discussion about the economic interaction of cross sector and cross jurisdictional markets and the influence of institutional investment both local and global. On issue Supply and Demand though the demand in May on the Commodities exchanges did not meet the incremental increases seen in previous months and the previously set floor price appears to have broken. If this continues and downstream factories use the opportunity to stockpile this will add further downward pressure on an already imploding market until such time as continued lows force producers to cut production to limit supply or bring forward shut down maintenance. You may find study of ‘market impact of financialization interesting’. Enjoy your day !