Jun 24, 2020
All futures contracts are generally for speculation or hedging.
Therefore, the general procedure of settlement is to void the original contract, settle the original contract through another contract, and only pay or collect the difference between the current price and the contract price.
Futures contracts for actual delivery and settlement are scarce.
Futures trading is the most significant feature of Commodity Exchange business activities.
In fact, commodity exchanges are organized primarily for futures contracts.
Futures contracts serve two different purposes: speculation and hedging.
They are either speculative or hedging contracts.
Speculation is an important part of commodity trading and is sometimes called speculative market.
All these speculations represent an attempt to peer into the distant future from the window of the present.
Speculation is an attempt to profit by estimating future price movements.
Goods can be bought at current prices and sold at higher prices in the future, and vice versa.
On the surface, the two seem to be the same, but in reality, speculation refers to the legal business activities of buying and selling real estate, commodities and so on based on the analysis of market trends and other factors affecting the price.
However, when people start to think without thinking and without the necessary resources to fulfill their promises, speculation becomes a pure gamble.