Is the Futures Market a Place for Speculators to Speculate?

The alame is a way for nickel producers and metal producers to be able to get some predictability in what they do, says Lake. But because of the way that market mechanisms work, that short you have in the market is subject to margin galls,. And if the price in the market goes up a lot, then you can wind up being asked for massive margin calls - which means you need a huge amount of liquidity. The people who were using the alame for the purpose for which it was really intended wound up suddenly being faced with these sive margin calls," writes Lake.