Participants in a Derivative Market | Hedgers, Speculators and Arbitrageurs | Geojit
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20 September 2020

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  More About Derivatives

Participants in a Derivative Market

The derivatives market is similar to any other financial market and has following three broad categories of participants:


These are investors with a present or anticipated exposure to the underlying asset which is subject to price risks. Hedgers use the derivatives markets primarily for price risk management of assets and portfolios.


These are individuals who take a view on the future direction of the markets. They take a view whether prices would rise or fall in future and accordingly buy or sell futures and options to try and make a profit from the future price movements of the underlying asset.


They take positions in financial markets to earn riskless profits. The arbitrageurs take short and long positions in the same or different contracts at the same time to create a position which can generate a riskless profit.

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