There's two schools of thought on this "supply and demand" thing. I think the bridge is the fact that the supply is NOT infinite. There has to be a willing seller for every buyer, and a willing buyer for every seller. If there is not, then the price is going to move. If there was infinite supply then the price would never move.
On Mon, Nov 29, 2010 at 11:13 AM, Astor <[email protected]> wrote: > Of course ES contract can exist only if there are both, buyer and a seller. > That is not the point, however. As a seller of ES, I am not limited by > a finite inventory. I can offer to sell as many contracts as I want (subject > to margin requirements). The supply and demand theory originally was > proposed in 1691 and formalized in 1817. It referred to trade of physical > goods with finite inventory and demand driven by need for consumption of > those goods rather than speculation. > > ------------------------------ > *From:* skunktrader <[email protected]> > > *To:* JBookTrader <[email protected]> > *Sent:* Mon, November 29, 2010 12:25:12 PM > *Subject:* Re: [JBookTrader] Re: Indicators > > > > Astor wrote: > > In capital markets, the supply > > often can be manufactured instantly, in any quantity at will and the > demand can > > be deferred without any adverse consequence: e.g. there is no physical > > limitation on the number of ES contracts that can be written by the > sellers and > > the buyers can easily forego the purchase if they believe the price is > too high, > > no matter what the book imbalance is. > > > Not really. By definition, an ES contract can only exist if there is > both a buyer and a seller. > > -- > You received this message because you are subscribed to the Google Groups > "JBookTrader" group. > To post to this group, send email to [email protected]. > To unsubscribe from this group, send email to jbooktrader+ > [email protected]. > For more options, visit this group at > http://groups.google.com/group/jbooktrader?hl=en. > > > -- > You received this message because you are subscribed to the Google Groups > "JBookTrader" group. > To post to this group, send email to [email protected]. > To unsubscribe from this group, send email to > [email protected]<jbooktrader%[email protected]> > . > For more options, visit this group at > http://groups.google.com/group/jbooktrader?hl=en. > -- You received this message because you are subscribed to the Google Groups "JBookTrader" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/jbooktrader?hl=en.
