where look alike contracts get interesting is when they cover contracts traded on other exchanges allowing the exchange to capture some of the trading activity on a commodity they are not known for this allows some of the pure risk speculation to take place away from the actuals in the underlying futures contracts 
moreover since none of the physical commodities are involved with the look alike contract trading the position limits meant to temper commodity speculation can be skirted criticisms of look alike contractslike many derivative products look alike contracts have their share of detractors the main purpose of the futures market is traditionally to aid in price discovery and allow supply and demand risks to be hedged or offloaded onto parties better prepared to handle them look alike contracts leave the physical commodity behind by being a derivative of a derivative instead of influencing the price of oil for example look alike contracts allow traders to bet against one another while arguably providing no new market price signals traders of look alike contracts do argue that last point as they are market participants so the volume and open interest of their speculation give market information on their opinions on the price performance of the underlying futures contract former cme group ceo craig donohue called look alike contracts parasitic second order derivatives in 2011 3 at the time of course ice was aggressively creating look alike contracts using cme traded futures as a benchmark the rivalry between the two exchanges no doubt colored his opinions all in all look alike contracts are no different than other over the counter products in that they allow high level market participants to make bets with money they are prepared to risk in a very specific way 