NISM Series XVI - Commodity Derivatives Exam Notes
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Hedgers are generally commercial producers, processors, exporters and importers of traded commodities who participate in the commodity derivatives markets to manage their spot market price risk.
Speculators are traders who speculate on the direction of future prices with the goal of making a profit. Day Traders, Position Traders and Market Makers are the subset of speculators.
Day traders take positions in derivatives contracts and liquidate them prior to the close of the same trading day.
Position Traders maintain overnight positions, which may run into weeks or even months, in anticipation of favourable movement in the commodity futures prices.
Market Maker is a class of member who is obligated to provide liquidity in the Exchange in the relevant commodity by giving two way quotes at all times on such terms and conditions as may be prescribed by the Exchange from time to time.
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