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For futures contracts, instruments which compensate the trader for price changes, may be used to hedge price risk (i.e. lock in a price), and are in zero net supply, standardized, exchange-traded, margined, marked-to-market, netted, and centrally-cleared.
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Trading futures, how does it work in practice?
But what I don't understand is how, in practice, trading futures works. … When I look at video's of people trading futures they buy and sell futures just like they would stock; by placing buy and sell orders. …
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What is the point of hedging in this scenario?
It is then easy to see that in all cases we get 79 million in total (for the contract + the futures)
Now my question is, why did we enter into the contract in the first place? … Is there not a significant risk of not finding a counter party to close the position and being stuck with the futures? …