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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (27492)	9/12/1998 7:17:00 AM
From: GROUND ZERO™	Read Replies (2) \| Respond to of 94695

Jim, Actually, I believe the futures markets were originally designed for the agricultural and livestock industries. The futures contracts gave the farmers the opportunity to sell future contracts against their cash crop in case of flood or drought, or whatever. For example: If the current cash price is $6.23 a bushel and a deferred contract has been bought up to $8.56 a bushel by speculators because of anticipated weather problems, then the farmer can sell his crop in the futures market ahead of his harvest. This guarantees his price no matter what happens to his crop in the meantime. This was why these markets were even invented, to protect the farmers. The role of the speculator in the futures market is to provide liquidity for the specific markets so that crops can be hedged. Over time, other market futures were added, e.g., tropicals, oils, equities, financials, currencies, metals, and so on. New markets are being added all the time due to popular interest in this game. I suspect you probably already know what I just explained, but I thought it might be interesting to post a bit of commodity market history for anyone who might read this. Have a great weekend. GZ