In commodity markets it's usually the producers of commodities who hold short positions as hedges. If the price of Nickel skyrockets, their shorts will lose mo

In commodity markets it's usually the producers of commodities who hold short positions as hedges. If the price of Nickel skyrockets, their shorts will lose money but their inventory will also become more valuable. But due to the nature of the instrument, they need to come up with additional margin for mark to market losses. This isn't a question of solvency but of liquidity.If there's a short squeeze and the price gets completely disconnected from fundamentals, the producers and the brokers might go under and speculators who held long positions will make a massive profit. I don't see how that is more socially useful than the exchange stepping in to correct a market failure. The participants in commodity markets produce literal tangible goods, it's not a casino.