: Alex pays Sarah the difference in cash. Sarah uses that profit to buy actual coffee from her local supplier at the new, higher market price, effectively "hedging" her costs. 🛠️ How to Buy Commodity Futures in Reality
: Three months later, a freeze in Brazil causes coffee prices to jump to $1.50 per pound. how to buy commodity futures
Basics of Futures Trading * A commodity futures contract is an agreement to buy or sell a particular commodity at a future date. * Commodity Futures Trading Commission | CFTC (.gov) How To Invest In Commodity Futures - SmartAsset : Alex pays Sarah the difference in cash
: Sarah and Alex enter a futures contract through a regulated exchange. They agree on a price of $1.10 per pound for delivery in six months. higher market price