“Derivatives form an important role in business. For example, how could a commodity producer plan their future if left to the ebbs and flows of pricing. Simple, they take out a derivative to lock in a future price thus enabling orderly planning.”
explain why a farmer, or a commodity producer, would need leverage when planning to lock in future pricing?
the corruption allows leverage to maximise market influence.
a commodity producer would very rarely lock in 10x his production.
