The basic difference between speculators and hedgers in futures contracts is that speculators:
A) will profit regardless of the direction of price change.
B) do not have an offsetting position in the underlying commodity.
C) are concerned only with long-term price movements.
D) take a position in more than one commodity at a time.

Question

Quizplus · Accepted Answer

Speculators do not have an offsetting position in the underlying commodity; they aim to profit from price changes, unlike hedgers who use futures to mitigate risk in their existing positions.

The Basic Difference Between Speculators and Hedgers in Futures Contracts