Spot merchants whose business involves a large number of raw materials such as soybeans, corn and plastics are usually faced with the risks brought by price fluctuations of these raw materials, which may seriously affect their profit scale, and even cause losses and business failures in serious cases. Futures market has two basic functions: hedging and price discovery. If properly developed, it can effectively serve the real economy.

Of course, speculation and arbitrage also exist in the futures market. Enterprises need counterparties to reach a deal when hedging, and speculators participate in the futures market to provide counterparties to help enterprises transfer price risks. Speculators are willing to take a certain risk of price fluctuation, because they may make profits by speculating in the futures market.