[arin-ppml] ARIN-prop-146 Clarify Justified Need for Transfers

[Jeffrey Lyon]

On Thu, May 5, 2011 at 2:12 PM, Sweeting, John
<john.sweeting at twcable.com> wrote:
> A large percentage of the price of a gallon of gas is attributable to Speculators, companies that never even take ownership of the oil, they just buy it and sell before it is even shipped.
>

It's a gamble. Derivatives markets can protect sellers or they can
protect buyers. A forward contract for delivery in 3 months at
$110/barrel might allow the buyer to take delivery at a time when the
actual market price is $150/barrel, or it might result in the buyer
overpaying if the market price drops to $90/barrel. Speculators have
to tread cautiously to prevent from taking serious losses in doing so.

Speculators are not an evil force that merely drives prices up,
although this happens sometimes. Their primary benefit is to create
liquidity. In an IP market, buyers and sellers could complete
transactions same day, thanks to speculators. Without them, these
transactions could take days, weeks, or months.

-- 
Jeffrey Lyon, Leadership Team
jeffrey.lyon at blacklotus.net | http://www.blacklotus.net
Black Lotus Communications - AS32421
First and Leading in DDoS Protection Solutions