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I have a gold mine in my back yard (pls keep this a secret). I know that I'll have 100 oz by 12 months from now. As a hedge position, I sell one future contract. I've locked in my sale price, and I no longer worry that the price of gold will drop before my 100oz is mined and ready for sale. A speculator is on the other side of that contract. In effect, he ...


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A speculator trades futures in hope of making a profit. He makes a profit if he buys and later sells a contract at a higher price (or he shorts a contract and buys it back at a lower price than he sold it for). He is simply trying to profit from price change. A hedger is someone who buys and sells the actual commodity and uses futures to protect ...


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