Are the hedgers and speculators same?

[malcolm789]

HI. People, can someone explain me the difference between the hedgers and speculators? In addition, what are the options and futures?

 

[Joan Peter]

The futures contracts are a type of obligations to sell-buy a product for a defined price on specified date. Futures are not giving any right to the buyers, but the options give the buyer right and avoids obligation. In the same way, the hedgers are interested towards the products of the futures contracts. They can be either a buyer or seller. The speculators on other hand focus more or trading contracts for profit and not for commodity. You can find more information about these basic concepts of the futures trading in websites, but I can suggest you to visit Online Future Trading , since the author is a dedicated futures traders and his blog give some valuable advice for investors.

 

[Rhody Trader]

Very simple, very basic explanations.

Hedgers trade to protect (hedge) exposures they have. Speculators trade to profit on the movement (or in some case the lack thereof) in prices.

Futures are agreed upon contracts to do an exchange at a future time and price. Options are conditional agreements to do an exchange at a future time and price if the buyer of the option so chooses.