To be fair, you could also be a real world user of a commodity and productively use futures markets. For example, an airline or trucking company using them to hedge fuel prices.
To be fair, you could also be a real world user of a commodity and productively use futures markets. For example, an airline or trucking company using them to hedge fuel prices.
Sure, and increasingly those people are being played for suckers. The article makes that point.
Less so than those buying it for spot? They need oil one way or another, whether from a future contract or the spot market (or downstream thereof).
Then your average price is higher than average. I heard airlines don't use futures any more because they need to keep costs low.
Future exists to stabilize instantaneous commodity prices.
They also allow some insights on future demand, which can help you plan production of your commodity.