Managing trading risk

This case study examines the importance of futures trading and focuses more specifically on commodity futures trading. The futures market plays a key role in the modern economic system because it enables investors to trade in a cost efficient way and to eliminate some of the risk from their trading activity. Commodities lie at the heart of modern industrial society and include a wide range of primary products ranging from foodstuffs, such as rice, grain and coffee, to industrial raw materials, such as oil and…