relationships questions For Futures & Options Market class I want one example for a how to use each instrument for a speculative trade, an arbitrage trade or hedging. Three short answers for each instrument. Futures can be used to speculate on the price rise or fall of a commodity, to arbitrage carry costs or to hedge the purchase or production process or a long position in the underlying. Expand and give a simple examples. An option can be used to speculate on the price rising or falling or changes in volatility, to arbitrage a market price versus a synthetic position or to generate income or limit loss as a hedging tool. Expand and give simple examples. A CDS can be used to speculate on the credit quality of a bond rising or falling, to create a sythentic position that is cheaper than the underlying instrument or to protect the value of bonds owned in a portfolio. Expand and give simple examples. IRS can be used to speculate on rising rates, arbitrage credit spreads or hedge fixed rate investments. Expand and give simple examples