Futures Market Participants

Who Trades Futures Markets?

Futures traders fall into two primary categories: hedgers and speculators . Hedgers seek to transfer price risk to other market participants in order to partially lock in or protect the value of a physically commodity or to protect against the cost of a future purchase.

Speculators seek to profit from predicting market direction. Speculators trade in varying times, ranging from short term exposure (scalping) to day trading, swing trading, and long term position trading.

Other types of traders are Commodity Trading Advisers (CTAs), Commodity Pool Operators (CPOs).

Together, these varied market participants help determine the fair price of a commodity market through a mechanism known as "price discovery ".