Why do hedgers trade so much?

Ing Haw Cheng, Wei Xiong

Research output: Contribution to journalArticle

22 Scopus citations

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 classifying trading by speculators as speculation, as hedgers frequently change their futures positions over time for reasons unrelated to output fluctuations, which is arguably a form of speculation.

Original languageEnglish (US)
Pages (from-to)S183-S207
JournalJournal of Legal Studies
Volume43
Issue numberS2
DOIs
StatePublished - 2015

All Science Journal Classification (ASJC) codes

  • Law

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