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by drexlspivey
1634 days ago
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> I would argue that futures (and options) are still gambling. And you would be wrong because those instruments were designed to hedge (reduce) risk. If you are a grain producer and you are worried that the grain price might go down before your next crop you sell a future to lock the price, if you are a flour mill and worry that the price will go up you buy a future. Can all financial instruments be used for speculation? Of course, same as buying a ton of grain not because you need it but because you expect the price to go up. |
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That tail now wags the dog. The futures markets in commodities are much larger than the actual markets.