Calculate basis properly. Be prepared to meet margin calls. Don't shift from hedger to speculator. Be sure to close out your transaction. Proper use of the futures market can lock in an acceptable price for your cotton weeks or months ahead of delivery.
Speculators trade in the futures market also, but they have no product to deliver.
The only way they can make money is to guess correctly which way the market is going. By Dr. O.A. Cleveland, Jr., Extension Marketing Specialist Mississippi State University does not discriminate on the basis of race, color, religion, national origin, sex, age, disability, or veteran status. Publication 1140 Extension Service of Mississippi State University, cooperating with U.S. Department of Agriculture . Published in furtherance of Acts of Congress, May 8 and June 30, 1914. Ronald A. Brown , Director Copyright by Mississippi State University.