At present, hedgers are allowed to match the transactions in one year, meaning smoother earnings.
And futures were not built for investors, they were built for hedgers and speculators.
Hedgers might be Kraft, which is feeling the pinch of rising prices, or Southwest Airlines or BP.
In a thriving liquid market, an army of hedgers and speculators would converge on a fair price.
Secretary Geithner keeps reminding all that FTT hurts retail investors, pension funds, farmers and hedgers, more than banks.
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On one side are hedgers using the market to lock in, say, the price of corn or Treasury notes.
Daily, as many as 3, 000 hedgers and speculators swarm the pits to scream for corn, soybeans and U.S. Treasury bonds.
Now he is a floor broker, whose job is to execute trades for buyers and sellers--hedgers and speculators betting on interest rates.
If Treasury yields rise further, mortgage hedgers will exacerbate the trend.
Blum adds that since the CBOE is the playgorund of hedgers and speculators, its business tends to be less prone to market movements than other exchanges.
This is a sensible and POSITIVE outcome as risk premiums represent the cost that hedgers pay to speculators to bear the risk they want to avoid.
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Or hedgers could buy put options, which give them the right to sell gold if it is to their advantage, but walk away if prices rise.
Shares in other active hedgers, who have committed to sell gold at lower prices than can be fetched now, such as Cambior, a Canadian producer, have also dropped sharply.
If, as even critics concede, CDSs can be a useful hedging instrument, then excluding "naked" buyers would reduce the breadth and depth of the market, putting "legitimate" hedgers at a disadvantage.
Right now even professionals fail to understand some basics about the financial system from the workings of the New York Stock Exchange and Nasdaq to the role of hedgers and speculators trading at CME Group.
At which point the Lords face the classic dilemma which confronted their predecessors a century ago, between "hedgers" who will seek to minimise the damage (as they see it) and "ditchers" who will fight to the last, and probably bring the government's legislative programme to a halt, in the process.
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