Futures investors come under 2 classifications: hedgers and also speculators. The key economic objective of the futures market is hedging, which is getting or marketing futures agreements to offsets the dangers of changing prices in the cash markets. Hedge investors, such as big industrial firms that might take delivery of particular assets, like coffee or wheat, use futures agreements to protect (hedge) themselves versus transforming money prices.
Speculators, nevertheless, comprise the majority of futures investors. tradingfutuers.com Speculators have no commercial passion for the underlying commodity and also have no passion for taking delivery of the asset. The profit potential is what encourages speculators to trade product futures. Speculators acquire when they think that rates will increase and also they market when they think that prices will fall. Futures investors making use of STARS would certainly be considered speculators.