Physical Trading and Hedging Question
Hello physical traders,
I have a couple questions regarding hedging:
1) Are all cash moves hedged immediately? I would assume it would be different depending on the size of the merchant firm, but in general, do physical traders immediately hedge price risk, or is there an element of speculation by delaying when or if it gets hedged?
2) It seems that futures are widely regarded as the main method of hedging. Why are options and swaps secondary to futures? Is it because of the ease at which you can take the opposite position? I ask because in crazy market swings, wouldn't futures be subject to margin call risk?
I apologize if the questions are basic. I am a recent college grad who is looking to get more info about the physical space!