In November 1636, when the burgomasters' plans to screw the tulip planters took effect, traders began to process the impending changes into their thinking. By late November 1636, "buyers had already begun treating the contract prices as option strike prices set at around 10 times the actual prices." As a result, "contract prices soared to reflect the expectation that the contract price was now a call-option exercise, or strike price rather than a price committed to be paid for future bulbs." By February, the price had risen 20 times. "That's what caused the tulipmania," says Thompson.
So, the swift rise in prices for contracts on tulip bulbs in late 1636 and early 1637 was less a speculative frenzy than a market rationally responding to rule changes.
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