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19 What is a Commodity Futures Contract? Transfer of Risk Price Risli Time Futures Contract The Trading of the Futures Contract IVIargins Hedging These are basic aspects involved in commodity trading. Figure 1-1: What is a Commodity Futures Contract?
Producers | | Speculators | | End-Users | | |
The diagram shows what the major players are in the commodity game. Figure 1-2: Three Types ofPlayers" in Futures Markets
Commodities are traded in pits on a trading floor. This is how the trading floor is designed at the Chicago Mercantile Exchange. Figure 1-3: Diagram of Trading Floor at the Chicago Mercantile Exchange
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