Series 66: 3.8.4.1. Benefits And Risks Of Futures

3.8.4.1. Benefits and Risks of Futures

One of the primary benefits of derivatives for investors is that they can be used to hedge against broad economic downturns. By guaranteeing an investor’s right to buy or sell a commodity at a price in the future, a derivative can limit the effects of a possible swing in a security or even the broad market.

Another benefit of using derivatives is that they allow investors to speculate on