WASHINGTON, Oct. 4 (Xinhua) - Market speculators held a net long position of soybean futures this week, according to a report from the US Commodity Futures Trading Commission on Friday.
Traders work in S&P 500 stock index options pit at the Chicago Board Options Exchange (CBOE) in Chicago, Illinois, US, on Thursday, Nov. 16, 2017.(File photo: VCG)
Non-commercial investors, commonly treated as market speculators, held a net long position of 38,765 soybean futures contracts for the week ending Tuesday.
Commercial traders, commonly treated as hedgers, held a net short position of 33,401 contracts.
Speculators and hedgers are different types of investors. Speculators try to make a profit from the assets' price volatility, whereas hedgers attempt to reduce or "hedge" the amount of risk created by price volatility during the holding period of the assets.
When investors "short" some kind of financial asset like currencies or commodities, they hold a bearish view on the asset and believe its price will decrease.
The soybean futures, traded on the Chicago Board of Trade, are derivative financial contracts that obligate the parties to transact an underlying asset at a predetermined future date and price. The underlying asset of each contract includes 5,000 bushels of soybeans.
