Why Do Hedgers Trade so Much?
22 Pages Posted: 23 Nov 2013
There are 2 versions of this paper
Why Do Hedgers Trade So Much?
Number of pages: 22
Posted: 13 Nov 2013
Last Revised: 25 Jan 2014
Downloads
214
Date Written: November 2013
Abstract
Futures positions of commercial hedgers in wheat, corn, soybeans and cotton fluctuate much more than expected output. Hedgers' short positions are positively correlated with price changes. Together, these observations raise doubt about the common practice of categorically classifying trading by hedgers as hedging while trading by speculators as speculation, as hedgers frequently change their futures positions over time for reasons unrelated to output fluctuations, arguably a form of speculation.
Suggested Citation: Suggested Citation
Cheng, Ing-Haw and Xiong, Wei, Why Do Hedgers Trade so Much? (November 2013). NBER Working Paper No. w19670, Available at SSRN: https://ssrn.com/abstract=2358762
Here is the Coronavirus
related research on SSRN
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.
