Who uses futures contracts?

Hmm, who exactly utilizes futures contracts? Let's delve into this question. Futures contracts are typically utilized by a diverse range of market participants. On one hand, farmers and commodity producers often turn to futures contracts to lock in a future price for their crops or goods, hedging against potential price fluctuations. This provides them with a degree of certainty and stability in their income streams. On the other side, investors and speculators also engage in futures trading. They might do so to capitalize on price movements or to diversify their portfolios. Futures contracts allow them to trade in assets without necessarily owning the physical commodity, providing a liquid and efficient market to trade in. Moreover, institutional investors like hedge funds and banks also utilize futures contracts. They might use them for portfolio management, risk reduction, or even as a tool for leverage. Futures contracts offer them flexibility and precision in managing their exposures and returns. So, to answer your question, futures contracts are used by a wide range of actors in the financial markets, from farmers to investors, each with their own unique reasons and objectives.