If hedgers are the people who wish to avoid price risk, speculators are those who are willing to take such risk. speculators are those who do not have any position and simply play with the others money. They only have a particular view on the market, stock, commodity etc. In short, speculators put their money at risk in the hope of profiting from an anticipated price change. Here if speculators view is correct he earns profit. In the event of speculator not being covered, he will loose the position. They consider variousfactors such as demand supply, market positions, open interests, economic fundamentals and other data to take their positions.
SPECULATION IN THE FUTURES MARKET

• Speculation is all about taking position in the futures market without having the underlying. Speculators operate in the market with motive to make money. They take:
• Naked positions – Position in any future contract.
• Spread positions – Opposite positions in two future contracts. This is a conservative speculative strategy.

Speculators bring liquidity to the system, provide insurance to the hedgers and facilitate the price discovery in the market.