End-users

From MarketsWiki

An end-user is the company that actually produces a product or service. The end-user will use the financial product in a risk management strategy to guard against conditions that limit it from selling its product or service.

All active and growing markets need liquidity providers from various areas. End-users provide that liquidity. End-users are important players in the market, as are hedge funds, institutional players and trading firms.

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For example, a retail company in a shopping mall sells most of its products during the holiday season. An unexpected snowstorm will slow the store's visitors, resulting in a reduction in sales. The end-user could use a weather derivative to offset a potential weather change, thus limiting losses.

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