Why Might a Speculator Prefer to Trade Futures Contracts Rather

question 20

Essay

Why might a speculator prefer to trade futures contracts rather than the underlying asset?

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Definitions:

Special Order

A special order is a one-time or unusual request from a customer that can require different pricing, terms, or production considerations compared to standard orders.

Regular Sales

The routine transactions and revenue generated from the normal business operations excluding any extraordinary or non-recurring sales.

Financial Advantage

This refers to the benefit gained by an entity in a financial context, which could include lower costs, higher revenues, or other monetary gains.

Outside Supplier

An external company or entity that provides goods or services to another company, typically part of the supply chain.