In All Futures Contracts, Even Commodity Futures, Only 1% to 3

question 25

Essay

In all futures contracts, even commodity futures, only 1% to 3% of futures contracts are delivered. That is, at expiration, the party that originally purchased a futures contract has sold a futures contract to offset their position. Since most market participants do not deliver or receive delivery of the contract, does this mean that most futures markets participants are speculators?

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Definitions:

Auditory Nerve

A component of the auditory system that transmits sound information from the cochlea in the inner ear to the brain.

Cochlea

A spiral-shaped, fluid-filled tube in the inner ear that plays a key role in the process of hearing by converting sound vibrations into nerve impulses.

Fluid-Filled Tube

A tube or vessel containing liquid, often used in biological systems or mechanical devices to transfer fluids.

Nerve Impulses

Electrical signals that transmit information between neurons, allowing for communication throughout the nervous system.