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People use "natural" or "baseline" to refer to the price a commodity returns to after a bubble burst. Though, price movements are more chaotic than that and you can have short term spikes, swings from external effects ex: natural disasters, short term 'bubbles', and demand from things like tax policy changes so "natural" is somewhat vague.

So, the implication is it's what happens when you remove short term and artificial effects.



In practice I've never heard anyone use the word "natural" in regards to price movement in a tradeable product, not in the five years I've been working in the financial industry. Sounds like more of a layman's term, perhaps. But the line between short-term and long-term movements is nearly non-existent since one typically affects the other, and the idea that there is any sense of normal price movement that lies behind all that turbulence is fairly naive.


It is a defined term, but I think trymas is referring to the layman's usage.

"natural price" https://en.wiktionary.org/wiki/natural_price

A price for a good or service that is equal to the cost of production.


Oh well that is a totally different term than the context it is being used in here.




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