SPECULATIVE TRANSACTIONS IN 1926 MAY WHEAT FUTURE 9 
upon the price is much more immediate and certain, except in cases 
when the operations of one or more large speculators are offset by 
the operations of other large traders who are simultaneously taking 
the opposite side of the market. 
THE NET POSITION OF THE EIGHT TRADERS CORRELATED WITH PRICE 
_For the information of the technical reader there is presented 
herewith the results of a correlation of the position of these eight 
traders with the price of the 1926 future. Not ali of the future was 
used in this correlation for the reason that during the early part and 
during the last part of the life of any future, trading is small, and 
the effect of the larger operations in one or more of the other active 
futures mainly controls the price. Thus, to account for the price 
decline during August and September, 1925, during which time 
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Fic, 5.—The combined net position of traders No. 1 and No. 2 compared with the average closing price, 
by days, for the 1926 May wheat future — 
trading was maintained in the 1925 September, the 1925 December, 
and the 1926 May futures, it would be necessary to study the trading 
operations in the September and December futures which were at 
that time relatively much more important than the May. Therefore, 
only that portion of the 1926 May wheat future was used which 
included the period during which the May carried a larger volume 
of open commitments than any other future. The period used began 
with October 22, 1925, and extended to April 29, 1926, inclusive, a 
period of 155 trading days. 
Correlating the combined net position of the eight traders with 
the average closing price, by days, resulted in a direct correlation of 
+ 0.69, with a probable error of +0.03. 
THE INDIVIDUAL POSITIONS OF THE EIGHT LEADING SPECULATORS 
The major movements in the combined position of the eight traders 
shown in Figure 4 reflect largely the operations of traders No. 1 and 
No. 2. This is clearly shown in Figure 5. With the exception of a 
26826°—27——2 
