The argument mostly boils down to that most rational actors will only tolerate a +/-N% change over the lifetime of a futures contracts So the average future co

The argument mostly boils down to that most rational actors will only tolerate a +/-N% change over the lifetime of a futures contracts So the average future contract +/-N% (overall futures) roughly becomes the maximum volatility you can see out an asset over that duration. If it is exceeded people may stop trading futures, lowering the number of swaps, and by extensions trades of that asset. Providing a method to -let steam out- of a volatile system. —— There are many examples against this (housing crisis 2008). The main example for is Chicago future exchange in the 70’s and 80’s http://www.econlib.org/library/Enc/FuturesandOptionsMarkets.html http://www.econlib.org/library/Enc/FuturesandOptionsMarkets....