Most of the derivates were initially created with a real life use case. For example airplane companies buy options on fuel to hedge the fuel price so that they can offer prices in the long run. Farmers use futures on corn prices so that they know at what price they can sell their crops in advance and calculate their margins. Of course many of these tools are not really used as they were meant in the beginning...
Most of the derivates were initially created with a real life use case. For example airplane companies buy options on fuel to hedge the fuel price so that they can offer prices in the long run. Farmers use futures on corn prices so that they know at what price they can sell their crops in advance and calculate their margins. Of course many of these tools are not really used as they were meant in the beginning...
That makes sense, thanks for your answer. Have a great day!
!HBIT
!PIZZA
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