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TFC Commodity Trading Forum

Re: COT Catagories/CO/Lee/CO/Lee
In Response To: Re: COT Catagories/CO/Lee/CO ()

The speculator has no use for the product, he benefits only by price fluctuation; the only reason for being in the market. A power plant, on the other hand, looks to control cost and will use markets to hedge and set cost on the balance sheet. If, given his prevailing opinion and perceived conditions, a higher input cost is anticipated, he will go to the futures market and buy to hedge.. I might add this is quite rare when the user goes to market for hedging and can be quite explosive. The Commercial user and speculator are distinct players with entirely different objectives. CO