Question: What statement ( s ) below is ( are ) true about hedgers and speculators? If a speculator buys cattle with a futures contract and
What statements below isare true about hedgers and speculators?
If a speculator buys cattle with a futures contract and holds the contract until delivery, heshe is not required to take delivery as the futures contract expires.
Hedgers actually want to buy or sell the physical commodity. When they use futures or forward contracts, they will typically hold it until the end and deliver or take delivery of the commodity that they traded.
Hedgers use futures or forward contracts to trade commodities for future delivery, and not because they want to profit from trading and retrading those contracts.
Speculators have no interest in the physical commodity. When they trade in the futures market, their only objective is to profit from trading and retrading those contracts.
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