--%>
Assignment Help - homework help

Hedgers and Speculators

Explain hedgers and speculators are two types of economic agents required for a derivatives market to function.

E

Expert

Verified

Speculators and Hedgers are two types of market participants which are necessary for the operation of derivatives market.  Speculator attempts to profit from change in the futures price.  For doing this, speculator will take a short or long position in futures contract which depends on his expectations of future price movement.  Whereas, a hedger wishes to provide the price variation by locking in the purchase price of underlying asset through a long position in the futures contract or the sales price through a short position.  In effect, hedger passes off the risk of price variation to the speculator who is able, or at least more eager, to bear this risk.

   Related Questions in Financial Accounting

  • Q : Political events affecting the local

    Discuss about the different ways in which the political events in the host country affects the local operations of MNC.

    		•
  • Q : Define Expenditures Define Expenditures

    Define Expenditures with suitable example?

    		•
  • Q : Personal identities-Organization health

    Personal identities: Generally employees like to work as they interact with animals and success motivates them, they learn new things in their routine job and they are a member to team.  But some job requirements like conducting euthanasia impact

    		•
  • Q : Analyse the ramifications for

    HOMEWORK ASSIGNMENT FOR ADMINISTRATIVE LAW"The problem in today's complex legal environment is that the law is not able to be divided conveniently into segments. Any apparently discrete sect

    		•
  • Q : Accouning Required parts are clearly

    Required parts are clearly describes at the end of the questions and additional resource contains the journal article related to question three.. Approx 2000 word assignment.. First Question is of not more than 1000 words to make memorandum and its example is given at end of assignment and require

    		•
  • Q : Relationship-To Look for in each other

    What is Relationship and what are the traits that make any relationship happy and committed forever ?

    		•
  • Q : What do you mean by the term turnover

    What do you mean by the term turnover?

    		•
  • Q : Assessing risk in the workplace

    Describe the primary steps in assessing risk in the workplace with respect to Health and safety, identify and discuss what actions should be taken to manage or wipe out the risks posed?

    		•
  • Q : Closing entry for financial accounting

    A journal entry that moves the effects of revenues or expenses to the owners' equity account. Only temporary account that is on the income statement is closed. The purpose of a closing entry is twofold. First, it moves revenue to retained earnings on the balance sheet

    		•
  • Q : Shadow balance Define the terms shadow

    Define the terms shadow balance?

    		•