Investopedia

Continue to Site »

Cash Commodity

Filed Under » , ,
Dictionary Says

Definition of 'Cash Commodity'

In futures trading, the cash commodity is delivered for payments. In certain contracts, a party is obligated to physically deliver the actual cash commodity, such as soybeans, oil, or treasury bills. Other contracts can be cash-settled, meaning that cash changes hand, rather than the physical commodity. In contrast to cash commodities, delivery on future contracts typically happens at a later date.
Investopedia Says

Investopedia explains 'Cash Commodity'

A simplified view is that the futures market is comprised of two groups: speculators and hedgers. Speculators are looking to make profits by betting on price changes and have no interest in taking possession of the underlying commodities. Hedgers are firms which either produce or require the underlying commodity. They are often interested in taking or making physical delivery of the underlying commodity, at a specified price. For example, an airline may hedge its operating costs by using a futures contract to lock in the price on future delivery of jet fuel.

Articles Of Interest

  1.

    Getting Started In Foreign Exchange Futures

    Learn how these futures are used for hedging and speculating, and how they are different from traditional futures.

  2. An Introduction To Managed Futures

    Their inverse correlation with stocks and bonds make these alternative investments worth getting to know.

  3. Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.

  4. Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.

  5. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.

  6. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.

  7. Should You Add A Securities License To Your Qualifications?

    Clients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.

  8. The Best Way To Buy Silver

    Discover whether ETFs or physical bullion is the best way for investors to get exposure to silver.

  9. Exploring Non-Dollar Currencies For Forex Trading

    Learn how investments in foreign currencies can diversify your portfolio.

  10. Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  2. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  3. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  4. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  5. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.

  6. Lease To Own

    An arrangement where an individual enters into a lease agreement with an owner with the inclusion of a clause that typically gives the individual the right, but not the obligation, to purchase the item leased at a predefined price and time.
Trading Center