Futures contracts allow both parties (buyer and seller) to reduce or accept risk. However, it would be very difficult to do if you had to know the person on the other side of the trade since it narrows the playing field. But by broadcasting futures quotes to the entire world, somebody will bid higher and another will offer for less money. It becomes more efficient when you can broadcast to lots of people (none of which you will know).
Think of it like this: If you were selling a rare baseball card, would you be better off finding a friend to buy it from you? Or would you rather broadcast it to the entire world through eBay? That’s essentially the benefit that futures markets bring to investors and speculators.
Posted in 
Tags:
Futures contracts allow both parties (buyer and seller) to reduce or accept risk. However, it would be very difficult to do if you had to know the person on the other side of the trade since it narrows the playing field. But by broadcasting futures quotes to the entire world, somebody will bid higher and another will offer for less money. It becomes more efficient when you can broadcast to lots of people (none of which you will know).
Think of it like this: If you were selling a rare baseball card, would you be better off finding a friend to buy it from you? Or would you rather broadcast it to the entire world through eBay? That’s essentially the benefit that futures markets bring to investors and speculators.