Tripped Up by the Margin

``Margins, the amount of collateral investors must post against their trades, are designed to help reduce the risk to exchanges and calm overheated markets. But recently that safety valve is being blamed by some for wreaking havoc on markets such as silver, gasoline and cotton. As prices swung wildly, major commodity exchanges ratcheted up their demands for collateral, setting off a chain reaction that forced many investors to liquidate their holdings, sending prices tumbling... Silver's tumultuous ride in late April is a case in point, Mr. Pirrong said.''