The long hedge is a futures market trading strategy that involves taking a long position in a futures contract in order to offset the risk of price movements in the underlying asset. The long hedge can be used to protect against both downside and upside price risk. The long hedge is typically used by institutional … Read more
A clearing fee is a charge assessed by a clearinghouse for the services it provides in clearing trades. Clearing fees are assessed on both sides of a trade, and are generally a percentage of the trade value. The clearing fee is used to cover the costs of clearing trades, including the costs of maintaining a … Read more
. Contract for Differences (CFD) Definition and Examples. How long do CFD contracts last? There is no set answer to this question, as the duration of a CFD contract can vary depending on a number of factors, such as the type of asset being traded, the market conditions at the time, and the preferences of … Read more
The delivery definition is the specific criteria that must be met in order for a futures contract to be considered “delivered.” This includes the specific asset or commodities to be delivered, the quantity, the delivery date, and the location. What is the delivery time? The delivery time for a futures contract is the date on … Read more
Exchange-traded commodities (ETCs) are a type of investment that allows investors to gain exposure to the prices of commodities without having to take physical possession of the underlying assets. ETCs are traded on exchanges and can be bought and sold in the same way as stocks and other securities. Commodities are raw materials that are … Read more
Physical delivery is the process of taking possession of a commodity that is the subject of a futures contract. The process involves the transfer of ownership from the seller to the buyer and the actual receipt of the commodity by the buyer. This is in contrast to a cash settlement, which involves the payment of … Read more
Backwardation: What it is, why it happens, and an example. What is Forwardation? The term “forwardation” refers to a situation in which the price of a commodity for future delivery is higher than the price for the same commodity for immediate delivery. This often occurs when there is a strong demand for the commodity in … Read more
A commodities exchange is an organized marketplace where traders can buy and sell standard contracts for the purchase or sale of specific commodities. These contracts determine the quality, quantity, and delivery date of the underlying commodity. Commodities exchanges exist to provide a central location for trading activity and to standardize the contracts so that they … Read more
The term “What is Pay/Collect?” is used in the futures and commodities trading industry to describe the process of making or taking delivery of a commodity. In order to make or take delivery of a commodity, a trader must first be registered with the commodity exchanges where the commodity is traded. Then, the trader must … Read more
Warehouse financing is a type of financing that allows businesses to borrow money against the value of their inventory. This can be a useful way to get funding for businesses that have a lot of inventory but may not have the cash flow to cover a traditional loan. Warehouse financing can be used to finance … Read more
