Potential for commodities markets to default

This is a discussion on Potential for commodities markets to default within the Commodities forums, part of the Trading Choices category; Hi guys, I was just reading this, about how in 06 there was a nickel shortage which caused problems for ...

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Old Jun 30, 2010, 3:31pm   #1
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Default Potential for commodities markets to default

Hi guys,

I was just reading this, about how in 06 there was a nickel shortage which caused problems for the LME and people who had trades open:

http://news.silverseek.com/TedButler/1156198042.php

I wonder, does trading CFDs on futures contracts distance you from this problem? Because a) you're buying from a market maker and b)They're like... contracts on contracts? Hence the CFD company would owe you regardless?

Just doing some research, mainly into gold and silver, and what I could potentially have to deal with if there were a shortage and I held a long position in either.

Also thinking about what super high prices in either metal might mean even if you made a killing in long positions - ie, currencies might be worthless, hence you've made nothing when you finally sell for millions in worthless fiat money. In that case your CFD broker might be a goner anyway who knows?

Thoughts?
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