At the same time, a wire manufacturer who buys copper to use as a raw material in the production of wire might buy a copper futures contract to lock in his raw materials cost. In both cases, the copper mining company and the wire manufacturer could, if they wished, hold their futures contracts until they expired, and then make or take delivery through the Exchange at a warehouse designated as an Exchange delivery location. They use the futures to help stabilize their revenues or their costs. Others chart the movement of futures prices, often using computer programs to help them figure out the trends. Both types of speculators hope their price projections are right.
Speculators also play an important role in the market by adding liquidity.
They often take the opposite sides of the bids or offers that are in the market, ensuring that business will be done. Some exchange markets, such as those for stocks, use a system of brokers, also called specialists, who are required to trade certain stocks, ensuring there is a market for them. On the New York Mercantile Exchange, however, a trade will not be completed unless someone is willing to take the other side of a transaction. It is also important to realize that the Exchange does not set the prices of the traded commodities. The prices are determined in an open and continuous auction on the Exchange floor by the members who are acting on behalf of their customers, the companies they represent, or themselves.