Futures Price Discovery
Futures prices increase and decrease mainly due to the many factors that influence the buyers and sellers expectations about what a specific commodity will be worth in the future. With the influx of supply and demand, and as buyers/sellers get updated information, buying/selling decisions are often reassessed and prices of a specific
futures contract may bid up or down. This price discovery process is never ending. The competitiveness of it makes for a huge economic benefit of futures
trading.
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