Exchanges are the creations of modern economic development, designed and operated for the benefit of the commerce, industry and people of the civilized world. Therefore we welcome trading in refined sugar futures and the opportunity to offer you the advantages that may be derived from a conservative, intelligent use of its services. The Exchange provides certain quality standards and other regulations to safeguard your interests. But your real assurance of protection lies in the _character_ and reliability of your broker. If your broker is not strong financially you do not have back of your contract the responsibility that you might otherwise have. If you had a favorable contract with a broker who became insolvent, you would have no means of forcing the fulfillment of the contract, and no way of securing the profit which was due you. The thing to do, of course, is to choose a broker who is so strong financially that you incur no danger in this respect whatsoever. Use the Exchange when the Market is Favorably out of line In considering the illustrative examples in this booklet, it should be borne in mind that the measure of protection afforded is relative and not absolute. The theory of exchange operations is that the exchange market will move relatively the same as the market for the actual commodity. This cannot be strictly true, although the exchange market must of necessity follow very closely the actual market, because all the sugar must, in the final analysis, come from the actual market. If thrown out of parity with the actual market, the exchange market is bound to come back eventually. In the exchange market anyone can buy and anyone can sell. The market is subject to many outside influences, and the fluctuations reflect and accentuate the varying shades of market opinions of many individuals. But in the market for the actual commodity, the quotations are made by comparatively few men, which means that there will be less fluctuation. Therefore, it is obvious that although the exchange market _should_ be on a parity with the actual market, the unequal fluctuations of the two markets will be constantly throwing them out of parity or "out of line." There are times when the market will be so out of line that the _buying_ of futures should result profitably. At other times, with conditions reversed, _selling_ of futures seems obviously advisable. We do not claim that jobbers can protect sugar purchases with absolute and exact precision. On the basis of long exchange experience, we _do_ believe, however, that by a discreet use of the Exchange, and by using the market when quotations are _favorably_ out of line, jobbers can do so to their decided advantage. Selling of Futures--Hedging As the word itself indicates, a "hedge" on the Exchange is a protection.