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January/February 2011, 
Vol. 93, No. 1
Posted 2011-01-03

What Explains the Growth in Commodity Derivatives?

by Parantap Basu and William T. Gavin

This article documents the massive increase in trading in commodity derivatives over the past decade—growth that far outstrips the growth in commodity production and the need for derivatives to hedge risk by commercial producers and users of commodities.