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The purpose of this paper is to investigate whether the change of margin in Chinese futures markets has policy spillover effects.

The paper constructs a model based on Harzmark and on Chng, taking Chinese futures markets status quo as a single species and restrictions on foreign investment into consideration, introduces the assumptions of spillover effect of speculators, then obtains investor's demand function. Subsequently, the effects of Shanghai Futures Exchange's 11 instances of margin changing are analyzed.

The paper finds that in the Chinese futures market, margin changing has impact on the open interest (OI) and the speculator spillover effect is validated.

The irrational behavior of investors in markets is not taken into account in the model and data about spillover speculators were not directly available.

The paper usefully analyzes the effects of the Shanghai Futures Exchange's 11 instances of margin changing from 2000 to 2007 and examines the actual effects of margin‐changing policy, in the views of OI, trading volume and the externality, the results showing that margin changing has impact on investor structure and validates the existence of the assumed speculator spillover effect.

The purpose of this paper is to investigate the impacts of different gray markets’ structures on both supply chain decisions and associated profits.

Within the context of gray markets, using game theory approach in this paper, supply chains have been considered as assets of manufacturers, distributors and speculators, within which manufacturers sell products to distinctive markets either directly or through authorized distributors, while speculators buy products from a lower price market and then sell them in a higher price market. Our study has examined different decision variables within such a framework.

Considering a situation where one manufacturer sells its products either directly in one market (Market 1) or through its authorized distributor (Market 2), due to different products prices in both markets, results have shown that, when market elasticity is less than its critical value, a speculator can sell a gray market product arbitrage in market 2, whereas when the market elasticity is greater than its critical value, a speculator can sell a gray market product arbitrage in market 1. In addition, manufacturers—as leaders of Stackelberg game—are always the most profitable stakeholders within a gray market supply chain.

In this study, equilibrium results for each market have been obtained, optimal results have been compared, and accordingly, valuable insights have been developed. Such results would help managers to take better managerial decisions, as well as strategizing policies in gray markets.

In this paper, we have considered a gray market where both distributors and speculators exist and act as parallel channels. To the best of our knowledge, the extant literature focuses either on distributors or speculators, but never concurrently on both. In fact, the coexistence of one distributor and one speculator in a gray market will impact their own decisions, as well as both decisions and profits of other stakeholders, and hence, will exert an impact on the manufacturer side.

The currency crisis literature now comprises three main schools of thought; first‐generation models consider the depletion of foreign exchange reserves as a consequence of incompatible exchange rate and monetary policies. Second‐generation models are based on speculative theories whereby the belief of investors that monetary policy will be modified as a result of an attack makes the attack possible. Third‐generation models have been designed in an attempt to explain the nature of the Asian crises of 1997/1998. Each school of thought considers the nature of a speculative attack. However, this model uses a search framework to explain the timing of an attack in terms of an information externality in the foreign exchange market. It then assesses the efficacy of a Tobin tax in delaying and thereby possibly preventing such a crisis.

The purpose of this paper is to research and analyze the price of gold futures based on heterogeneous investors' overconfidence.

This paper divides the traders of gold futures market into two kinds: the speculators and arbitrageurs, and then constructs a market equilibrium model of futures pricing to analyze the behaviors of the two kinds of traders with overconfidence. After getting the decision-making function, the market equilibrium futures price is attained on the condition of market clearing. Then, this paper analyzes how the overconfidence impacts on futures price, volatility of the price of gold futures and the effects on individual utility.

Under different market conditions, the overconfidence psychological impacts of heterogeneous investor on the price and volatility of futures are different, sometimes completely opposite.

In the past literature, the relationships between overconfidence and the price or volatility are positive; however, the study shows that sometimes it is positive, and sometimes it is negative.

This study aims to examine whether global gold futures returns volatilities and trading activities are threshold cointegrated.

This study considers 11 gold futures markets, including 3 developed futures markets and 8 developing futures markets. This study also analyzes futures trading activities for speculators and hedgers. This study uses a nonlinear threshold vector error correction model (TVECM) and a threshold Lagrange multiplier (LM) test proposed by Hansen and Seo (2002).

The findings show that global gold futures return volatilities (FRV) and trading activities are not always threshold cointegrated. Most developed futures markets exhibit threshold cointegrated of gold FRV and trading activities for speculators and hedgers, whereas some developing futures markets exhibit threshold cointegrated. It suggests that speculators and hedgers trading activity conveys valuable information about changes in market volatility dynamics. On the other hand, responses to error-correction effect among gold FRV and trading activities for speculators and hedgers are dramatically different for developed and developing gold futures markets, respectively, particular in the unusual regime.

Research results show that threshold cointegration between global gold FRV and trading activities matters but not always. Thus, threshold relations have improved the authors’ understanding of global gold futures price discovery process with a threshold. For research limitations, this study uses only near month futures contracts, as it contains more information but not using far month contracts.

The findings may have important trading implications with additional insights in a(n) (un)usual regime further regulation may be detrimental to the price responsiveness in futures markets if increased price volatility and trading volume are attributed to liquid and efficient markets.

The findings may have important policy implications with additional insights. For example, in a(n) (un)usual regime greater regulatory restrictions may be warranted to decrease market inefficiencies if increased price fluctuations are caused by increased trading volume. Policymakers could enhance futures trading liquidity or restrict speculating positions.

This study examines whether global gold futures returns volatilities and trading activities are threshold cointegrated by using a nonlinear TVECM. The authors detect that some global gold futures returns volatilities and trading activities are threshold cointegrated but some are not. Hence, the findings determine whether the volatility–volume threshold relation holds across countries and investigate the determinants of cross-country differences in different traders.

Empirical evidence on the determinants of corporate FX speculation is ambiguous. We note that the conflicting findings of prior studies could be the result of different methodologies in determining speculation. Using a novel approach to defining speculative activities, we seek to help solve the puzzle of the determinants of speculation and examine which firms engage in such activities and why they do so.

This paper examines an unexplored regulatory environment that contains publicly reported FX risk data on the firms' exposures before and after hedging per year and currency. This unprecedented data granularity allows us to use actual reported volumes instead of proxy variables in defining speculation and to examine whether the convexity theories are empirically supported in FX risk management.

We find that frequent speculators are smaller, have more growth opportunities and possess lower internal resources, which indicates unprecedented empirical evidence for the convexity theories in FX risk management. Further, we provide evidence that corporate speculation might be linked to the application of hedge accounting.

We help solve the questions of which and why firms engage in speculative activities. This can provide valuable information to various stakeholders such as financial analysts, investors, or regulators, which can help prevent imperiling corporate losses and curb excessive speculative financial activities.

In order to question the unresolved issue of the determinants of speculation, this paper is the first to use openly available accounting data with actual reported FX exposure information before and after hedging in defining speculation, instead of relying on proxy variables for FX exposure and derivative usage with potential estimation errors.

This paper aims to conceptually analyse the role of speculation in society to determine whether agricultural commodity index funds, a new form of speculation, contribute to sustainable development.

The theoretical arguments justifying the value of the market economic system for generating sustainable development and the positive contribution speculators make too in this context are elaborated. It is then considered whether the arguments justifying traditional speculation hold for agricultural commodity index funds.

Traditional forms of speculation contribute positively to sustainable development; primarily due to the information they uncover on demand and supply factors which affect prices. Agricultural index funds are a danger to sustainable development, as their transactions are not based on demand and supply factors but simply represent demand for the diversification effect which commodities generate when added to an investment portfolio.

The article offers a new approach to assessing whether agricultural index funds contribute to sustainable development. Empirical research has been conducted on whether speculation via index funds has unjustifiably affected commodity prices. However, results of these investigations have been inconclusive due to stark limitations in data availability. By approaching the issue from a conceptual point of view, the article delivers theoretically sound arguments as to why agricultural commodity index funds are likely to have an unjustifiable effect on prices and, hence, are a danger to sustainable development. This has strong implications for finance practice and regulation.

The purpose of this paper is to empirically analyze the role of differentiated margin system in leading investors' investing behavior and then optimize investor structure in futures markets.

Using economic experimental research method, this paper designs and conducts a futures market experiment according to experimental research's basic norms, thus acquiring needed and credible empirical data.

By analyzing the experimental data, it is found that compared with situations in futures markets that implement uniform margin system, investors' (especially speculators') futures open position and the ratio of their open position and futures turnover are both significantly higher, in futures markets that implement differentiated margin system. On the other hand, differentiated margin system has no effects on hedgers' futures turnover, but significantly reduces speculators' futures turnover.

The findings suggest that compared with uniform margin system, differentiated margin system is beneficial to effectively restrict both speculators' and hedgers' speculating behavior and lead hedgers' market participation.

In order to resolve the problem of unreasonable investor structure in China's futures market, i.e. lack of hedgers and over‐speculating, China's futures market's regulators should reform the margin system and adopt differentiated margin system to lead investors' rational behavior and optimize investor structure.

This paper empirically analyzes and verifies, for the first time, the roles of differentiated margin system in affecting investors' investing behavior. The futures market experiment designed and used in this study is a pioneering and exploratory experiment.

The purpose of this paper is to analyze strategies for gamblers/investors to increase their chances of reaching certain monetary and/or survival goals while facing a losing proposition.

The paper investigates the use of credit by gamblers/investors as a means of increasing their expected survival time and thus their likelihood of winning. The paper considers a strategy in which a gambler/investor engages in bet doubling and uses credit to maximize the probability of winning a specified amount.

The model presented in this paper identifies the amount of credit that will make it possible for a gambler/investor to become a winner with an arbitrarily high degree of probability, even while facing a losing proposition. However, bet doubling can lead to large losses, and negative profits can be expected if the gambler/investor is faced with unfavorable odds. As an extension, the paper considers the impact of limited liability and finds that in that case, total losses are restricted and the gambler/investor can expect a positive net gain even while facing a losing proposition. It is also shown that the cost of obtaining credit is an important consideration and that it is ill‐advised for a gambler/investor to engage in such a strategy when the cost of credit is high relative to the probability of winning.

Although bet doubling is not new to the gambling literature, this paper considers the use of credit as a means of increasing survival time and expected net gain. Applications of the model are particularly useful to gamblers/investors when credit can be obtained at low costs.

We develop an interactive framework to model speculation (over regulation) and regulation (of speculation) in a greenhouse gas (GHG) permits market. In our proposed model, big traders engage in speculation by strategically withholding and releasing permits to influence the temporal path of permit prices in order to maximize their profits. The national government/regulator has an incentive to stabilize permit prices by suitably manipulating stocks of permits. Thus, the GHG permits market can typically be characterized by circular interdependence in which big traders will be “gaming” the regulator to generate profits: the state of the market affects speculative behavior of traders that in turn impacts on government's behavior, which in turn impacts on the state of the market. The interactive framework explores the gaming between speculators and a regulator, or government, to shed crucial insights on the nature of equilibrium in possible global emissions trading schemes (GETS). By so doing, we are able to unravel potential pitfalls of any global trading system in pollution permits for arresting global warming. Once policy makers are aware of these pitfalls, for example, a “culture of speculation” as opposed to a culture of safety, they can devise a suitable mechanism to bypass these potential pitfalls.