Sign in to view more content
Create your free account or sign in to continue your search
Welcome back
By clicking Continue, you agree to LinkedIn’s User Agreement, Privacy Policy, and Cookie Policy.
New to LinkedIn? Join now
or
By clicking Continue, you agree to LinkedIn’s User Agreement, Privacy Policy, and Cookie Policy.
New to LinkedIn? Join now
Harikrashna Parmar
20 / Vice Chairperson of Placement Cell / Finance and Management Studies / Pursuing BMS /
Published Oct 24, 2023
There are typically 3 players in this market.
1) Hedgers: A hedger can be a farmer, manufacturer, importer and exporter. He simply buys or sells in the futures market to secure the future price of a commodity which is intended to be sold at a later date in the cash market. This helps to protect themselves against the risk of price as I mentioned it in the basics of derivatives market.
2) Speculators: They unlike hedgers do not try to minimize the risk of price but rather they seek out the profit opportunities from the risky nature of the underlying asset. They do not actually seek to own the underlying asset by the end of the contract.
3) Arbitrageurs: Suppose the price of the same asset is unusual in two different markets, there will be the Arbitrageurs who will buy where it sells cheap and sell where it is expensive and book their profits. They help to equalize the prices and restore market efficiency.
* Shared for educational purpose only as per the knowledge gained during the personal, academic and professional journey. One must do their own research if trading or investing in real life.
To view or add a comment, sign in
More articles by this author
No more previous content
No more next content
Sign in
Stay updated on your professional world
By clicking Continue, you agree to LinkedIn’s User Agreement, Privacy Policy, and Cookie Policy.
New to LinkedIn? Join now
Insights from the community
-
Technical Analysis
How can you apply Fibonacci tools to forex trading?
-
Technical Analysis
How can you create a technical trading plan?
-
Technical Analysis
What's the best way to size your trades?
-
Technical Analysis
How do you use pivot points to determine entry and exit points in forex?
-
Investment Banking
How can you explain complex trading concepts to someone with no experience?
-
Investment Banking
How can you develop a successful trading strategy in a low-liquidity market?
-
Technical Analysis
How do you compare forex trading platforms?
-
Technical Analysis
How do you set entry and exit points with pivot points?
-
Technical Analysis
How can you distinguish futures trading from other asset classes?
-
Technical Analysis
How can you use candlestick charts to improve your forex trading?
Others also viewed
-
Is Crypto Truly Decentralized?
Brandon Chang 2y
-
Derivatives - Weapons of Mass Financial Destruction?
Adrian C. Spitters FCSI®, CFP®, CEA® Author, Private Wealth Advisor 4mo
-
E- Commerce and GST (Implications, Procedures and Formalities)
Advocate Shubham Borkar 5y
-
Understanding E-commerce Operators under GST
LogiTax India 7mo
-
Define Derivatives and explain the components of Derivatives
Kalpesh Arvind Shah 6y
-
Real accounts, Nominal accounts, and Personal accounts examples of each type of account
Dolly Kumari 5mo
-
Procure-to-Pay (PTP) process (T-codes) in SAP
Dolly Kumari 6mo
-
Here's a list of financial statements, along with a brief description of each! #FinancialStatements #Accounting #Finance #Business #Entrepreneurship.
Dolly Kumari 2mo
-
Technical words used in the Procure-to-Pay (P2P)
Dolly Kumari 1mo
-
Factors That Influence Currency Exchange Rates
Prof. (Dr.) Ripu Ranjan Sinha (MODI KA PARIVAR) 1y
