Speculators can reduce the cost of risk, making it worth their while to take it on for a fee. It is entirely possible for a farmer’s crop yield half to be only half the expected value - this could make the difference in their ability to continue farming. The possibility that they could produce more than usual is worth trading off to a commodity speculator because they are willing to bear the risk and provide a reliable payout, even if the yield is low. The transfer of risk alleviates the farmer of the psychological burden and real possibility of bankruptcy.

Insurance companies can likewise brave inherent and inescapable risks. It is good enough for the insurance provider to know the average rates of an incident occurring without knowing if it will happen to a specific individual. Combining this knowledge with a breadth of coverage of many customers makes it worth it to the insurer. On the other side, the relief of risk makes it worthwhile for each individual.