07-01-2021, 01:27 AM
Both buyers and sellers seek to profit from it. Usually, buyers tend to raise prices potentially. This leads them to ensure that they can access the product at a lower price if such a price increase occurs. Likewise, sellers predict a drop in the value of the commodity and, to maximize income, they try to use futures to lock in prices so they can sell at a higher price should the price drop. Of course, these forecasts are not always accurate, and both parties have a chance to realize losses on the contract. Read more about it here https://fractalerts.com/blog/future-vs-f...-contract/.