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Hedgers who buy stock index futures contracts

Discussion in 'Derivatives' started by helpme, Jul 22, 2017.

  1. helpme

    helpme

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    I have been wondering who are the possible hedgers who buy stock index futures. Try googling stock index futures hedging and all the search results will tell you hedgers sell index futures contracts for hedging purposes. Most people own shares, so hedging means they sell futures contracts. So, who are the hedgers who buy index futures?

    In a bear market, speculators will sell index futures. Hedgers always seem to sell index futures anyway. So, in a bear market, who are buying index futures? Are there hedgers who buy index futures or are the buyers mainly speculators?
     
  2. tech/a

    tech/a No Ordinary Duck

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    I buy and sell index futures.
    I don't use them as a hedge.
    You could easily though.
    Even long term by rolling from
    One contract to the next.
     
  3. kid hustlr

    kid hustlr

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    Tbh you're best thinking of everyone as a speculator, some have longer time frames than others.

    There's a lot of algorithmic buying and selling if the index which is linked to the underlying stocks, options, other.

    I don't have a direct answer for you as I don't know but to be thinking in terms of 'people only sell index futures to hedge their stock portfolio' is over simplifying it.
     
  4. CanOz

    CanOz Home runs feel good, but base hits pay bills!

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    ES COT.PNG
    All futures contracts are designed for hedging purposes and the rest of the participants are just liquidity, in my view.

    Here is a COT report of the S&P 500 e-mini index futures, compiled of data put out by the CFTC in the US. If you study the report and notice how the various participants position themselves as the price advances you can tell when and whom is hedging.
     
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