how speculators impact volatility
a commonly held belief is that the rise of speculators into the commodities futures markets has led to an increase in price volatility on futures contracts on the contrary some researchers have concluded that an influx of futures traders and the liquidity that they bring to the market have a stabilizing or hardening effect on futures prices these researchers suggest that futures markets are considered volatile not because of price fluctuations but because of a great deal of leverage available to futures traders by way of example equity margin requirements are generally around 50 whereas margins as low as 5 to 10 are common for futures contracts under these circumstances even small fluctuations in price can have a tremendous impact on the owner of a highly leveraged futures position special considerations