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Why do hedgers trade so much?

Author(s): Cheng, IH; Xiong, Wei

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Abstract: © 2014 by The University of Chicago. All rights reserved. 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.
Publication Date: Jun-2014
Citation: Cheng, IH and Xiong, Wei. (2014). Why do hedgers trade so much?. Journal of Legal Studies, 43 (S2), S183 - S207. doi:10.1086/675720
DOI: doi:10.1086/675720
ISSN: 0047-2530
Pages: 1 - 25
Type of Material: Journal Article
Journal/Proceeding Title: Journal of Legal Studies
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.



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