"Evil" Speculators? Evidence from Grain Futures Trading in Chicago During the Interwar Period

Elissa A.M. Iorgulescu, Alexander Puetz and Pierre Siklos

No 9522, CQE Working Papers from Center for Quantitative Economics (CQE), University of Muenster

Abstract: This paper retraces the origins of modern futures trading and provides new evidence to an open question in economic history, whether the assumed negative impact of speculation, which generated several regulatory and institutional changes, is reflected in interwar futures trading. To this end, we assemble a new dataset consisting of daily information on grain futures contracts traded at the Chicago Board of Trade. We first devote attention to the function and regulation of the early futures markets since these continue to influence market activities today. We then analyse econometrically the drivers of interwar speculative behaviour and the impact of speculators' position changes on the volatility of grain prices. Our findings reveal that speculators significantly adjust their trading positions according to past price and returns movements but follow different trading strategies before and after the onset of Great Depression. Nevertheless, we do not find any evidence of "evil" speculators amplifying the volatility of interwar grain futures prices.

Keywords: Interwar Period; Regulation; Speculation; Grain Futures Markets; Returns Volatility (search for similar items in EconPapers)
Pages: 58 pages
Date: 2022-01
New Economics Papers: this item is included in nep-his
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.wiwi.uni-muenster.de/cqe/sites/cqe/fil ... r/cqe_wp_95_2022.pdf Version of July 2022 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cqe:wpaper:9522

Access Statistics for this paper

More papers in CQE Working Papers from Center for Quantitative Economics (CQE), University of Muenster Am Stadtgraben 9, 48143 Münster, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Susanne Deckwitz ().