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are futures markets more liquid than the markets of the underlying commodities?

November 14th, 2010 | | | 1 Comment | |

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One Response to “are futures markets more liquid than the markets of the underlying commodities?”

  1. J Says:

    Usually they aren’t, as futures are hedged using the underlying markets. There are exceptions, for instance, from a trader’s perspective, you can offer futures to a client when the underlying market is illiquid and hedge on something else taking into account the correlations, but that’s kind of unusual.

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