*SPECULATION IN FUTURES MARKETS
Plays a Vital in the futures market. Not similar to manipulation
*LONG POSITION IN FUTURES
The graph depicts the pay-off of a long position in a future contract, which does demonstrate that the pay-off of a trader is a linear derivative, that is, he makes unlimited profit if the market moves as per his directional view, and if the market goes against, he has equal risk of making unlimited losses if he doesn’t choose to exit out his position.
*Example Long Postion
• On May 1, 2008, an active trader in the currency futures
market expects INR will depreciate a
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