Professionals like the grain merchants, energy firms and the portfolio managers use futures and options to reduce the risk to their business associated with volatile prices. For instance, a flour miller might use a futures contract to set a price now for wheat that he knows he will need to purchase in the future. This, instead of taking a chance of buying the wheat sometime in the future when the prices could be higher. Similarly, a natural gas producer might use a futures contract to set a price now for the gas he will sell in the future, locking in a profit rather than being exposed to the possibility of lower prices later. These types of futures and options' users are known as hedgers, and are in the market specifically to reduce risk.
Investors usually assume risks in exchange for reaping profits.
The futures and options market serves this function of risk transfer. The futures and options market also provides the economy with price discovery. The futures' prices are determined by supply and demand. An exchange itself does not set the price. It simply provides a place where the buyers and sellers can negotiate.