1.3.5. Basic Trading Strategies
Left to itself, the market for commodities would be diffuse and fragmented. Commodities trade at different times and places around the world, and the quality of the product is highly variable. Trading in derivatives provides valuable price information and market liquidity to the commodities market.
In the futures markets, arbitrageurs, speculators, and hedgers drive the market price of a product over all its trading months. Arbitrageurs help the