A investors might use the futures market to “lock in” a price

Diamond futures are financial vehicles that allow people to buy and sell natural resources like Diamond at predetermined prices in the future. A futures market is a place where producers of a natural resource like Diamond can get a guaranteed price for their production

A investors might use the futures market to “lock in” a price for diamond that he’ll buy a year from now. This is called “hedging” against his/her risk. End users are also common participants in the futures market. Like stock options, the futures market can be used for taking amazing risks. It can also be used to structure very conservative positions. It’s not a place for the average investor.

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