Cash Contract

Filed Under » ,
Dictionary Says

Definition of 'Cash Contract'

A financial arrangement that requires delivery of a particular amount of a specified commodity on a predetermined date. A cash contract is closely related to but should not be confused with a futures contract, in which positions are usually settled in cash. Futures traders are often hedging or speculating to manage risk or turn a profit, and are not interested in physically owning the commodities.
Investopedia Says

Investopedia explains 'Cash Contract'

There are other important differences between cash contracts and futures contracts. A cash contract creates a direct obligation between the buyer and the seller, whereas a futures contract obliges each party to an exchange's clearinghouse. Also, a cash contract can be drawn up for any amount that a buyer and seller can agree on, whereas a futures contract must be written for a predetermined, standardized quantity allowed by the exchange.

Articles Of Interest

  1.

    6 Asset Allocation Strategies That Work

    Your portfolio's asset mix is a key factor in whether it's profitable. Find out how to get this delicate balance right.

  2. Nobel Winners Are Economic Prizes

    Before you try to profit from their theories, you should learn about the creators themselves.

  3. Investing During Uncertainty

    The inability to forecast future events can turn the markets upside down. Find out how to stay right-side up.

  4. An Overview Of Commodities Trading

    Commodities markets, both historically and in modern times, have had tremendous economic impact on nations and people. Investing in commodities can quickly degenerate into gambling or speculation ...

  5. The Copper King: An Empire Built On Manipulation

    Find out how Yasuo Hamanaka's actions in the copper market forever changed the rules for commodity traders.

  6. Should You Trust Your Instincts On Gold?

    The trouble with gold is that even as stocks are going up and the gold price is hurting, investors and central banks are loading up on gold and silver like never before. There’s a disconnect ...

  7. An Introduction To CFDs

    The benefits of these securities abound, but high leverage also magnifies potential losses.

  8. Breaking Down Financial Securities Licenses

    Find out which exam you need to begin your career as an investment professional.

  9. Using Index Futures To Predict The Future

    Want to know whether the stock market will open up or down? Check out the index futures.

  10. How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  2. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  3. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  4. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  5. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...

  6. Bailment

    The contractual transfer of possession of assets or property for a specific objective.
Trading Center