Courses 1Lesson 1

                   Players in the Futures Markets & their Usual Roles

n 

n 

Producers

Sell to lock in profits.

•

Can buy at times.

•

Are usually farmers, banks,

mining firms, manufacturers, etc.

•

Often called ‘hedgers.’

n 

n 

Speculators

Buy or sell to make a profit,

•

Often called ‘traders’

but not to use the actual goods

(among other things).

or products.

•

Do not take delivery of the goods.

•

Often trade for short-term swings.

n 

n 

End-Users

Buy in order to use the product

•

Can be sellers at times.

in their processing or business

•

May not actually use the goods

concern.

they buy.

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C1L1-9

© 2000 MBH Commodity Advisors, Inc.

For now, I’ll spare you specifics of how futures contracts work.  These mechanical things will be

learned later.  What I want you to learn now are the concepts of futures trading.

The basic issue is, of course, why trade?

Summary

The futures markets operate on very specific factors which, when, understood, can allow you to trade

profitably.  To understand the markets, you must learn the underlying structure and functions of

commodity trading.