Some financial analysts feel that futures and options markets, rather than helping reduce risk and promoting the more efficient use of scarce resources, may in fact be aimed at wealthy investors, giving them a speculative outlet for their funds and, thus, the futures and options markets really increase risk.

Question

Quizplus · Accepted Answer

Futures and options markets, while designed for hedging and managing risk, can also be used for speculative purposes. Wealthy investors often engage in speculative trading in these markets, which can increase market volatility and risk, rather than reducing it.

Some Financial Analysts Feel That Futures and Options Markets, Rather