Futures are a zero-sum game in the sense that on the contract settlement date all the longs and shorts must net out, with the contracts either being cash settled or the longs taking physical delivery of the commodity in return for providing cash to the sellers.

However, during the time that a given futures contract is actively being traded there are very clear winners and losers in this zero-sum game. This is why market participants spend so much time & energy figuring out how other market participants are positioned, and more importantly what might motivate them to change their positioning in the future.

It is not conspiratorial at all to think that various market participants are using numerous & varied tactics in order to gain an advantage over other market participants. After all, this is the market wherein the #1 and overriding objective of all participants is PROFIT (even hedgers are utilizing futures contracts to lock in PROFITS).

In the 2013 market environment there are many new tricks ranging from millisecond trade execution to special order routing and dark pools. However, one of the oldest tricks in the book is stop running; this is a strategy of pushing price to levels which will trigger a large number of stop-loss orders then using this newly created liquidity to profitably exit one’s positions.

Friday morning’s stop tripping 5,000 contract market sell order in December gold futures was not part of any grand conspiracy to lower the price of gold. It was simply a trading tactic intended to have maximum market impact and wreak havoc at a key prize zone, which it did quite successfully!