Yes, naturally. Trading leveraged positions on anything creates bigger price moves. Indeed far from this being a bad thing, it helps with the supply and demand process since they are functions of the price.
Hypothetical instance: fund X wishes to speculate on bananas. The price is currently $1/kg. Fund X has insight (from weather modeling, surveying of farm yields, whatever) that there is going to be a shortfall of bananas this year. Fund X then buys epic quantity of banana futures contracts (not physical bananas, who needs a tonne of physical bananas?). This contract purchase is so big it forces price to $2/kg. Higher price then triggers farmers to overweight their efforts on bananas, shortfall is reduced. Beautiful isn't it?
Now suppose Fund Y is malicious and evil, with a lust for a good market bash-around. Sure he tries to smash down the price, but this just creates a great buying opportunity for Fund X, who knows the value.
This is just more doublethink. Competition exists naturally. Those who claim that the 'playing field isn't level' are more often than not losers, seeking to tilt a flat field in their favour. 'Regulatory framework' is the condescending invention of politicians who believe they know best and should control peoples lives.
You are determined to believe that 2+2=5 and that regulation and a free market can simultaneously occur, so we will use an example:
Bob wants to sell Jane 10,000 fish, and she wants to buy them.
Free market: he does so, she does so.
Now introduce example regulation: 'You cannot sell more than 1000 fish per year, to protect the business of small family fishermen who cannot compete with big fishing magnates.
Bob now attempts to sell the fish to Jane. Bob is prevented from doing so by a man with a gun stood between him and Jane. The man says 'that is more than 1000 fish, you are not permitted to make this trade'.
In the former case, the freedom is obvious - the trade simply happens. In the later case, the lack of freedom is obvious - some arbitrary organization has declared that it has the right to control certain aspects Bob's and Jane's actions by force.
Cognitive dissonance (doublethink) would be required to claim that in the latter case Bob and Jane were operating in a free market.
If it actually worked that way in all markets, yes it would be beautiful, but alas it doesn't! That is a grossly simplistic, and might I say very condescending analogy. When you have a large player in the futures market, acting with no limit and playing in a small market you then get a situation where it is very easy to suppress price constantly and make a profit doing it. The fact that these markets sell down very quickly and regain ground more slowly makes it a very simple operation to apply downward price pressure until the market breaks and then cover the sales at a profit. One of the things that makes this more possible in the silver is the unique nature of silver production, it is supply and demand inelastic because most of it comes out of the ground as a byproduct. Supply, by and large doesn't respond very well to price movement, it is certainly nothing like your grossly simplistic example.
Anywhoooo.... fish smish!
You are giving a spot market example while arguing that futures should not be limited! Nobody expects limitations in the spot market nor do they exist!!!!!! JPM are selling paper contracts
NOT silver, the paper contracts (futures) are limit in quantity (rightly so) while direct silver sales, per se,
are not! (rightly so) Again I repeat that the futures are limited because they offer the ability to swamp a market utilizing the leverage offered even if you have no ability or intention to supply or take the material being traded. It is very much like being able to short sell a stock,
naked, without limit. I can't imagine anyone would be silly enough to claim that is their right in a free market.
A case could be made that if you don't own it or can't borrow to sell then you have no natural right to sell it, in any market!!!
However futures markets are not even that stringent, they simply say that you can only sell so much (quite a generous limit BTW) and if you need to sell more you have to justify it with the exchange, hell it is not even a hard limit, big producers etc can exceed it as required if their real world hedging needs are larger than the rules cater for.
I'm amazed that you ignore the fact that most all market participants have willingly engaged in a futures market that have limits without complaint. Don't you think that if this where not advantageous these people would complain?
Anyway, your little "according to max" free market ideas are quaint and all but they have no bearing on the fact that JPM stand accused of abusing market power and exceeding position limits,a real criminal offense. Which is actually what you call Mr Butler a loon for pointing out. There is a class action against JPM right now over their decades of dubious activity in the silver market. Now I doubt that JPM will suffer much for it and I am sure it will be tied up in the "best legal system that money can buy" for so long that it will die a natural death of old age, but none the less there must be a prima facie case for the class action to get up in the first place.... seems that many don't agree with your idea of not criminal.
Hmmmm... double think... yeah LOL... more like NO THINK! Again you keep mashing together the various market types with your very confused ideas of how this silver market actually works. What can I say other that this is getting boring so ---> so long and thanks for all the fish, I'm leaving your fictitious and strange little "free market" planet that has no regulation and where all behave in a benign fashion in fear of 'market discipline' ! I look forward to skinning you in the market..... using the rules
Come trade Silver against me... I need to cut this months pay cheque.
CYA