Strong Hands

AAA

DEFINITION of 'Strong Hands'

1. The intention of futures-contract holders to receive delivery of the underlying commodity.
 
2. A futures-contract holder that is a well-financed speculator.  

INVESTOPEDIA EXPLAINS 'Strong Hands'

1. Only about 2% of futures-contract holders ever actually take possession of the underlying. They almost always close out their position (likely by taking an offsetting position) prior to the contract's specified delivery date. A strong hand is a contract holder who is willing and likely will take possession of the underlying. They are the overwhelming minority in futures trading.

RELATED TERMS
  1. Large Trader

    An investor or organization with trades that are equal to or ...
  2. Speculator

    A person who trades derivatives, commodities, bonds, equities ...
  3. Weak Hands

    1. The intention of futures contract holders not to receive delivery ...
  4. Cash Commodity

    In futures trading, the cash commodity is delivered for payments. ...
  5. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  6. Delivery

    The action by which an underlying commodity, security, cash value, ...
RELATED FAQS
  1. How can I profit from a decline in the drugs sector?

    Profit from a decline in the drugs sector by short selling or by purchasing futures contracts or put options. Investors use ... Read Full Answer >>
  2. What other options does an investor have to buying physical silver?

    A wide variety of investment options are available to traders wishing to invest in the silver market. Buying physical silver ... Read Full Answer >>
  3. How can I profit from a fall in the automotive sector?

    You can profit from a fall in the automotive sector by short selling automotive stocks and exchange-traded funds (ETFs) or ... Read Full Answer >>
  4. Why are futures contracts important?

    On the surface, futures contracts are an instrument of price speculators who want to hedge a price risk or profit from coming ... Read Full Answer >>
  5. How do I invest or trade market indicators?

    Market indicators – often used interchangeably with technical indicators and economic indicators in lay conversations – are ... Read Full Answer >>
  6. What kinds of financial instruments can I use a straddle for?

    Options are contracts that give the buyer a right to buy or sell a security at a certain price. They can be traded on futures ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Interpreting Volume For The Futures Market

    Learn how to read the volume reports, look at the relation to liquidity and interpret volume using open interest.
  2. Insurance

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  3. Active Trading Fundamentals

    Where And How Should You Make Your First Trade?

    New traders should enter markets that offer the greatest opportunity for learning their craft while keeping risk at a minimum.
  4. Options & Futures

    Introduction To Trading In Oil Futures

    An introduction to oil futures, how the market arrives at oil futures prices, what futures prices mean, and how investors can exploit them.
  5. Options & Futures

    How To Lock In Low Oil & Gas Prices

    We provide a quick overview of how companies can manage the risk of adverse moves in commodity prices by hedging in the futures market.
  6. Forex Strategies

    The 10 Riskiest Investments

    Investors seeking high returns must also be prepared for high risk. Here are ten of the riskiest investments available.
  7. Options & Futures

    Was Buffet Right about Derivatives as WMDs?

    Why Warren Buffet described derivatives as weapons of mass destruction, and when can they be helpful or harmful?
  8. Options & Futures

    Examples Of Exchange-Traded Derivatives

    We look at some of the most common exchange-traded derivatives.
  9. Options & Futures

    Advantages Of Trading Futures Over Stocks

    We look at the top eight advantages of trading futures over stocks.
  10. Options & Futures

    Why Trading Coffee Futures Is A Zero Sum Game

    Coffee futures trading is as close to a zero-sum game as you might find in investing. We look at the risks and rewards.

You May Also Like

Hot Definitions
  1. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  2. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  3. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  4. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  5. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
  6. Marginal Utility

    The additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important ...
Trading Center