Wednesday, May 12, 2010

Commodity Futures Tradings

Compared to cash contracts, which require payment against the physical delivery of goods immediately or after a specified period, a futures contract is a special type of agreement made strictly under the rules of a commodity exchange, which may or may not call for the actual delivery of goods and payment in cash on a future date.

According to Emery, a futures contract can be defined as a contract for the future delivery of some commodity without reference to specific lots, made under the rules of some commercial body, in a set form, by which the conditions as to unit of amount, the quality and time of delivery are stereotyped, and only the determination of the total amounts and the price is left open to the contracting parties.

Such contracts are meant exclusively for future settlement, though the exact date of the settlement is decided by reference to the wishes of the seller and the established rules of the commodity exchange. Such contracts do not specify the particular grade of a commodity, but impliedly refer to a basic grade called the contract grade, accepted as the common grade for all futures dealings. The details in respect to the amount, the time of settlement, the quality and so forth are mentioned in the rules and regulations, and are common to all such contracts. The contracting parties have to decide upon the price at which the contract is to be settled, sometime in one of the trading months specified by the exchange.

Futures contracts are made only in the ‘ring’ of the commodity exchanges, and not outside the exchanges. Only members of a commodity exchange can enter into such a deal. No outsider can become a party to a futures agreement. Such contracts can be made only in multiples of a fixed unit of trading. No such contracts can be made in fractions of these units.

20 comments:

  1. hey nice blog!!! visit me @ http://www.jaze-tech.info/. if u wanna do link exchange add me and buzz.

    ReplyDelete
  2. 錢,給你帶來歡愉的日子,但不給你帶來和平與幸福........................................

    ReplyDelete
  3. 在莫非定律中有項笨蛋定律:「一個組織中的笨蛋,恆大於等於三分之二。」......................................................................

    ReplyDelete
  4. 向著星球長驅直進的人,反比踟躕在峽路上的人,更容易達到目的。............................................................

    ReplyDelete
  5. 在莫非定律中有項笨蛋定律:「一個組織中的笨蛋,恆大於等於三分之二。」. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    ReplyDelete
  6. Commodity Tips services offering tips on commodity market to their customer for earning high profit on small investmentwe provide highly accurate intra-day trading tips for different commodities in the market includes: Gold, Silver etc. commodity Tips

    ReplyDelete
  7. Hi, I found a broken link on your site, this may affect your google ranking. Please email me back and I would be happy to point them out to you.

    Thanks!

    Randy
    randydavis387 at gmail.com

    ReplyDelete