The high risk,speculative nature of commodities futures is due primarily to

Question

Quizplus · Accepted Answer

Commodities futures require low margin requirements, which allow traders to control large positions with relatively little capital. This high leverage amplifies the potential gains or losses of the trade, making it a high-risk, speculative investment. While hedgers do participate in the market, they are not the primary reason for the speculative nature of commodities futures.

The High Risk,speculative Nature of Commodities Futures Is Due Primarily