Source: BURSA | Published: June 2022
Who trades the derivatives markets?
The users of derivatives markets are primarily composed of two categories, hedgers and speculators. The objective of the hedger is to use the derivatives market to offset the risk associated with holding the actual underlying asset or commodity. On the other hand, the speculator aims to profit by taking on the risk and opportunities that the derivatives market offer.
Let us look at the different profiles of users in the derivatives market.
Hedgers
Hedgers are primarily users with positions in the underlying markets, whether in commodities or financial assets. They use the derivatives markets to manage the risk of any adverse price movements in the underlying markets. A hedger could be a producer of commodities, a manufacturer
Tags: DERIVATIVES
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