| Futures are the most popular asset class used for hedging. Strictly speaking, investment risk can never be completely eliminated, but its impacts can be mitigated or passed on. (Related: A Beginner’s Guide to Hedging) Hedging through future agreements between two parties has been in existence for decades.
Farmers and consumers used to mutually agree on price of staples like rice and wheat for a future transaction date. Soft commodities like coffee are known to have standard exchange-traded contracts dating back to 1882. Let’s look at some basic examples of the futures market, as well as the return prospects and risks...............................................Full Article: Source
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