Cash Delivery
 |
Definition of 'Cash Delivery'1. The same-day settlement of a currency trade in the forex market. This means that delivery and settlement of the transaction occur on the same date that the currency trade is made. In order for this to occur, the forex position must be opened and closed within the same trading day.Also referred to as "same-day settlement." 2. In the context of futures contracts, a settlement term in a contract that stipulates that the underlying asset of the contract will not be delivered on the delivery date - rather, the net cash value of the position will be transferred to the applicable party instead. |
 |
Investopedia explains 'Cash Delivery'1. As is the case with most financial markets, when you place an order in the forex market, the trade is executed shortly afterward, but the settlement of trades - during which the trade details are entered into the books and records of the trading parties - typically occurs at a later time. Cash delivery is exceptional, because all of this happens in the same day.2. Rather than physically deliver the underlying commodity or asset to the contract holder, it is much easier to simply transact the net cash value of the futures position instead. This allows investors to hedge against price changes in the underlying asset without having to worry about physically taking delivery. |
Related Definitions
Articles Of Interest
-
Top 7 Questions About Currency Trading Answered
Whether you're puzzled by pips or curious about carry trades, your queries are answered here. -
Getting Started In Forex
Before entering this market, you should define what you need from your broker and from your strategy. -
A Primer On The Forex Market
Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers. -
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. -
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. -
The Future Of Cryptocurrency
The emergence of Bitcoin has sparked a debate about its future and that of other cryptocurrencies. Despite Bitcoin’s recent issues, its success since its 2009 launch has inspired the creation ... -
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves. -
How Leverage Is Used In Forex Trading
Forex trading by retail investors has grown by leaps and bounds in recent years, thanks to the proliferation of online trading platforms and the availability of cheap credit. The use of leverage ... -
Washing Trades In A Canadian Registered Account
For Canadian RRSP accounts, washing same-day trades and using money market funds to bridge the gap over a multi-day trading period saves investors the exchange fee and will help their bottom ... -
Investing During Uncertainty
The inability to forecast future events can turn the markets upside down. Find out how to stay right-side up.
Free Annual Reports