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Why does futures have the function of price discovery?
Futures price discovery means that the futures market can predict future price fluctuations and help to discover the role of future spot prices. Because the futures market is a highly organized and standardized market, it is almost completely competitive and has many participants, including producers, processors, traders and retail speculators. Therefore, market information is also gathered in the futures market, and the price obtained through centralized public bidding can better reflect market supply and demand.