People "made" 700k for him to lose it, less fees.
Because speculative trading is a zero sum game, it creates no wealth. And no, this isn't wheat farmers hedging bad weather.
Because speculative trading is a zero sum game, it creates no wealth. And no, this isn't wheat farmers hedging bad weather.
But of course, the same instrument can be abused by gamblers. But it's not the instrument itself that's the problem - it's that there are people gambling with money they can't lose.
I agree gamblers are also a problem, although I'm not sure it's really a distinct group from speculators. But if you look at the amount of resources spent to in effect lower insurance premiums, I think you'll find it's much larger. So yes, the lowered insurance premiums are good, but the costs are so high that on net it's negative for society.
Even farmers hedging bad weather isn't what it used to be:
http://nategabriel.com/egblog/wp-content/uploads/2019/01/6-2...
Speculative trading is a key component of markets. People speculate that X is undervalued, so they invest in X, this gives X more resources, so resources are allocated based on what people think has most potential for growth. People who continuously make bad predictions get filtered out of the market, so "what people think has most potential for growth" comes to approximate "what has most potential for growth", and we get efficient resource allocation.
This is a socially useless activity. Stop trying to force it.