Actuals

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DEFINITION of 'Actuals'

The physical commodity that underlies a futures contract or is traded in the physical market. This is the homogeneous commodity that is the basis for trade, either through the physical market or a derivative contract such as oil, corn or gold.

BREAKING DOWN 'Actuals'

Actuals are traded in either the physical market or the futures market. In the physical market, two parties enter into a private agreement to exchange the commodity for cash or another commodity, and delivery almost always occurs. In the futures market, two parties enter into an exchange-traded contract in which one party agrees to deliver a set quantity and quality of the underlying commodity while the other party agrees to purchase the commodity. In this case, delivery is not certain and parties can sell their positions before delivery.

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RELATED FAQS
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    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
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    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
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    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  4. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
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