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Conclusion: Banging the Close

In: Market Manipulation and The Price of Eggs

Author

Listed:
  • David Ress

    (University of New England)

Abstract

Henner’s close-of-trading drama in the egg futures market would become a not uncommon way of generating a artificial price in derivatives trading, particularly in derivatives with underlying assets that were also derivatives. While the Commodity Futures Trading Commission was able to sustain manipulation cases in some of these situations (in electricity and natural gas futures) it failed in a case involving interest rate futures in a decision that essentially held there was no such thing as an artificial price as long as both sides of a deal knew, or thought they knew, what they were doing. The point here: the dynamics of a competitive derivative market primarily functioning for price discovery, whether in egg futures or interest rates, can force prices to a trader’s predetermined goals that have nothing to do with the price of an underlying asset.

Suggested Citation

  • David Ress, 2025. "Conclusion: Banging the Close," Springer Books, in: Market Manipulation and The Price of Eggs, chapter 0, pages 119-141, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-87171-9_8
    DOI: 10.1007/978-3-031-87171-9_8
    as

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