Who Trades Futures?
Futures traders are traditionally placed in one of two groups: hedgers, who have an interest in the underlying asset (which could include an intangible such as an index or interest rate) and are seeking to hedge out the risk of price changes; and speculators, who seek to make a profit by predicting market moves and opening a derivative contract related to the asset "on paper", while they have no practical use for or intent to actually take or make delivery of the underlying asset. In other words, the investor is seeking exposure to the asset in a long futures or the opposite effect via a short futures contract.
Read more about this topic: Futures Contract
Famous quotes containing the word trades:
“Men and boys are learning all kinds of trades but how to make men of themselves. They learn to make houses; but they are not so well housed, they are not so contented in their houses, as the woodchucks in their holes.”
—Henry David Thoreau (1817–1862)