On Track

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DEFINITION of 'On Track'

1. A type of commodities delivery for futures contracts that is deferred and priced according to the seller's location FOB.



2. A physical commodity that is already loaded on railroad cars or trucks and ready for delivery.

BREAKING DOWN 'On Track'

1. In this form of contract, the buyer of the futures contract is agreeing to pay all associated freight costs for receiving the underlying commodity.



2. Commodities on track or on-track country station are ready to be transported to the necessary locations for the fulfillment of the contract obligations.

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  3. 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 >>
  4. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
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