So here is the question who is at fault? Is it demand or is it the speculator? I decided to find this out once and for all what is going on. In Michael Masters testimony he said that the Index Speculator is making things worse because of the calendar spread that is being created. The question though is Michael Masters right or wrong?
One of the things that I like to do is work through strategies on how I could make money. I like doing this because it comes pretty naturally to me. I learned that when in 1995 I was working on a mortgage kernel and helped the business implement the different ways to calculate a mortgage.
I created a PowerPoint slide deck that outlines what I think is a way to make money using an Index Speculator trade. What is interesting about this trade is that it is a sort of piggy back trade and only works because there is demand. Though this piggy back is not a harmless piggy back, but a toll gate piggy back. The trade is made worse by adding the fear factor, and hence this trade must be controlled.