The basic difference between speculators and hedgers in futures contracts is that speculators:
A) will profit regardless of the direction of price change.
B) are not protecting their commodity holdings.
C) are concerned only with long-term price movements.
D)take a position in more than one commodity at a time.

Question

Quizplus · Accepted Answer

Hedgers use futures contracts to protect against price movements in the commodities they hold or expect to hold, thereby reducing their risk of financial loss. Speculators, on the other hand, do not seek to protect commodity holdings but rather aim to profit from price movements in the futures market.

The Basic Difference Between Speculators and Hedgers in Futures Contracts