Speculators participate in the futures market to profit from price fluctuations, and in doing so, perform several vital economic functions by facilitating the trading of basic commodities and financial instruments:

1. Assuming risk in the hope of making a profit
2. Providing liquidity and capital
3. Providing a mechanism for price discovery

Speculators do not create risk; they willingly assume it in the hope of making a profit. In a market without these risk takers, it would be difficult, if not impossible, for hedgers to agree on a price because the sellers (or short hedgers) want the highest price, while the buyers (or long hedgers) want the lowest possible price. Through their participation in the futures market, speculators provide the liquidity and capital that lead to low transaction costs and reliable price discovery, great advantages to the hedgers.

In addition to assuming risk, providing liquidity and capital, speculators help ensure the stability of the market. They trade in the futures markets purely to profit from price fluctuations. The price of grain, for example, changes along with supply and demand. Plentiful supplies at harvest time usually mean a lower price for grain. Higher prices may result from such things as adverse weather conditions during the growing season or an unexpected increase in export demand. Financial instruments fluctuate in price due to changes in interest rates and various economic and political factors.

Speculators "buy contracts" (go long) when expecting prices to increase, hoping to later make an offsetting sale at a higher price, thus at a profit. Speculators "sell contracts" (go short) when expecting prices to fall, hoping to later make an offsetting purchase at a lower price, again, at a profit. What is unique about futures is that a speculator can enter the market by either purchasing or selling a futures contract. The speculator's decision of whether he should buy or sell depends on his/hers market expectations. When speculating in the futures markets, both profits and losses are possible – just as in owning the actual, physical commodity.

The profit potential is proportional to the amount of risk that is assumed and the speculator's skill in forecasting price movement. Potential gains and losses are as great for the selling (going short) speculator as for the buying (going long) speculator. Whether long or short, speculators can offset their positions and never have to make, or take, delivery of the actual commodity.