Textbook giving an example of hedging: «Suppose you'll need copper in May, and the current futures price for May delivery is $3.20/lb. You can lock in a price around $3.20/lb by taking a long position. If the price goes up, you can sell your position at profit, and the profit will offset the increased cost of the copper. If the price goes down, you sell your position at a loss, but the decreased price of the copper offsets that loss.»
Okay, but like... instead of buying a futures contract, selling that, and then buying copper... why don't I just buy and hold the futures contract?
I suppose one answer might be that the futures contract gives the seller more options about delivery than buying spot? (I know futures typically give the seller a lot of control, I don't know about spot.) But I'm not super confident that that's the answer, and it would be nice if the textbook at least acknowledged the question, instead of making me wonder if I've fundamentally misunderstood something.
(If I've fundamentally misunderstood something, please tell me!)
