"In the 27 years since hedge trading was discontinued in Pakistan, a new generation of entrepreneurs has emerged..." The most important economic function performed by futures trading is the price insurance offered through hedging, which has been defined as "the method employed by many dealers in cash commodities to protect themselves against losses which might result from price fluctuations." Hedging facilitates equitable national and international corton trade. Futures trading benefits the producer, middleman and manufacturer by stabilizing prices, guaranteeing deliveries and payments, minimizing price fluctuation risk and stimulating improvement in the quality of the crop.
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