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Non Commercial Trader

What does Non Commercial Trader mean?

Commodity Futures Trading Commission (CFTC) has segregated the traders in futures markets as: Commercial and Non-commercial Traders. While a commercial trader needs to be engaged in the business activities hedged by use of used the futures or option markets; a non-commercial trader is one who does not own the underlying assets or its financial equivalent and only holds positions in futures contracts.

Futures Knowledge Explains Non Commercial Trader

Non-commercial traders are individual investors, hedge funds, and financial institutions. For example, if an oil company hedges oil futures, the oil company is classified as a commercial trader.   But if an investor buys or sells oil futures, he is a non-commercial trader.

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