Commodity Exchange provides the centralized marketplace with transparent price. It also serves the commodities producers where they can sell their product to those who wish to buy for consumption or manufacturing. Commodity exchange makes the economy more efficient by providing active trading mechanism and platform. There are different participant in commodity markets like Hedger, Speculators and arbitrageur.

Speculator has important role on the commodity market. They provide liquidity to the markets, due to which commodity exchanges are able to survive for more than164 years. Even though speculators make up the majority of the trade on commodity exchanges today, but the purpose of exchanges are still same as they had 100 years ago.

Speculators are blamed for volatility, but they provide more opportunities to create better pricing and hedging for the commercials. Speculator helps to create an effective marketplace which as a whole benefits everyone involved in commodity markets.

Speculators are concern more on price movement, they seeks profit from the price of commodity moving up or down on the basis of market analysis. Speculators trade on the commodity market on the basis of market study but people some time compare commodity exchange as organized sort of casino for investor but imagine what would happen in the absence of commodity exchange. The standardized price for commodity would be difficult to establish. Producers and users would be dependent on individually finding buyers and sellers. Commodity producers will have high risk without the ability to hedge their risk. The world without commodity exchange would likely lead to higher price for commodities around the globe.