Hedgers create the market’s reason for existing. Speculators create the market’s liquidity and volatility. You cannot have one without the other.
The difference between the futures price and the spot price. Basis = Spot – Futures. At expiration, basis → zero.
The most successful futures traders treat it like a business:
A futures contract is a legally binding agreement to buy or sell a specific asset at a specific price at a specific time. Every contract has four standardized components:
When you "roll" a contract (sell near-month, buy next-month), you pay or receive a spread. In contango, rolling costs money. In backwardation, rolling earns money.
Hedgers participate to mitigate price risk. Their goal is not to profit from the market, but to lock in a price to stabilize their business operations.
Hedgers create the market’s reason for existing. Speculators create the market’s liquidity and volatility. You cannot have one without the other.
The difference between the futures price and the spot price. Basis = Spot – Futures. At expiration, basis → zero. a complete guide to the futures market
The most successful futures traders treat it like a business: Hedgers create the market’s reason for existing
A futures contract is a legally binding agreement to buy or sell a specific asset at a specific price at a specific time. Every contract has four standardized components: The difference between the futures price and the spot price
When you "roll" a contract (sell near-month, buy next-month), you pay or receive a spread. In contango, rolling costs money. In backwardation, rolling earns money.
Hedgers participate to mitigate price risk. Their goal is not to profit from the market, but to lock in a price to stabilize their business operations.