CME Group Inc. (NYSE: CME) is going to make it cheaper for traders to trade energy and metals futures, something which could make it easier and cheaper for traders, speculators, and investors to push prices higher. So goes the theory at any rate. The exchange will set the lower rates as of Monday, February 13, 2012.
Effectively, the CME is lowering the cost to trade crude oil, gold, silver, copper, and a few other commodities. So far this has had no impact on prices of the SPDR Gold Trust (NYSE: GLD), United States Oil Fund (NYSE: USO), iShares Silver Trust (NYSE: SLV), nor in the iPath DJ-UBS Copper TR Sub-Index ETN (NYSE: JJC).
In the past, margin costs were raised on traders as an effort to curb runaway trading to the upside by making it more expensive for traders and speculators to trade energy and metals. In short, driving up the cost of poker creates fewer gamblers. So what happens when they make it cheaper to trade?
JON C. OGG