Much of the futures trading you hear about is done as speculation. A futures contract guarantees delivery of a certain commodity at a certain price at a certain point in the future. So oil for June delivery at $55 a barrel.
But a lot of the trading (at least the kind that you see in movies, where agitated bros in Armani suits guzzle red bull and yell things across crowded trading floors and slam their terminals against their desks) represents a bet on where oil prices are going, not an actual attempt to procure oil.
However, there are people who are actually trying to get oil. For those people, there exist approved delivery facilities. These locations represent the place where the commodities get delivered when a futures contract is executed.
Related or Semi-related Video
Finance: What is speculation?6 Views
Finance a la shmoop what is speculation? wild bets crazy dreams invested upon the [Man placing bet and woman dreaming about money]
state lottery betting the ranch on red
drilling randomly on street corners hoping to find oil you don't want to do
that all right that's speculation the opposite of speculation in a sense is
well just real investing that is doing research on a company or an industry
finding the megatrend it feeds into and doing the math on its earnings and [Man completing math work]
realizing that the company will in fact in two years earn more like five bucks a
share rather than three bucks a share that well everyone on Wall Street ie the
stock brokers are publishing and predicting speculation is just kind of
throwing money at things on a wing and a prayer and you know hoping for that
miracle yeah but doesn't usually happen so just be an investor
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