Strong Hands

DEFINITION of 'Strong Hands'

1. The intention of futures-contract holders to receive delivery of the underlying commodity.
 
2. A futures-contract holder that is a well-financed speculator.  

BREAKING DOWN 'Strong Hands'

1. Only about 2% of futures-contract holders ever actually take possession of the underlying. They almost always close out their position (likely by taking an offsetting position) prior to the contract's specified delivery date. A strong hand is a contract holder who is willing and likely will take possession of the underlying. They are the overwhelming minority in futures trading.

RELATED TERMS
  1. Split Close

    A situation that refers to price differences within a series ...
  2. Last Trading Day

    The final day that a futures contract may trade or be closed ...
  3. Physical Delivery

    Term in an options or futures contract which requires the actual ...
  4. Delivery Price

    The financial value of the conveyance of the underlying commodities ...
  5. Wild Card Play

    Having the right to deliver on a futures contract at the last ...
  6. Registered Holder

    Shareholders who hold their shares directly with a company.
Related Articles
  1. Trading

    4 Equity Derivatives And How They Work

    Equity derivatives offer retail investors opportunities to benefit from an underlying security without owning the security itself.
  2. Investing

    Options Basics: Conclusion

    Options are sophisticated trading tools that can be dangerous if you don't educate yourself before using them. Please use this tutorial as it was intended - as a starting point to learning more ...
  3. Trading

    The Difference Between Forwards and Futures

    Both forward and futures contracts allow investors to buy or sell an asset at a specific time and price.
  4. Markets

    Boeing Q2 Deliveries Show Weakness Lies Ahead

    Boeing's defense deliveries are down by almost 20% and commercial shipments remain flat, foreshadowing weakness ahead.
  5. Investing

    Why Is Amazon Trying to Become a UPS?

    According to reports, Amazon is developing its own logistics system. Why?
  6. Personal Finance

    How Amazon's Restaurant Delivery Service Makes Money (AMZN)

    Amazon's delivery service acts as a loss leader to corner the market now before providing high margin revenue in the future.
  7. Trading

    Futures Fundamentals: How The Market Works

    The futures market is a centralized marketplace for buyers and sellers from around the world who meet and enter into futures contracts. Pricing can be based on an open cry system, or bids and ...
  8. Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  9. Markets

    Can a Starbucks Delivery Service Actually Succeed? (SBUX, DPZ)

    Starbucks (NASDAQ: SBUX) is going vertical. This week, it launched its much-anticipated delivery service with a test run beginning in New York's Empire State Building. Although it's a modest ...
  10. Managing Wealth

    The Role Of Speculators In The Commodity Market

    Contrary to popular belief, speculators are important for the market. Find out exactly what they do.
RELATED FAQS
  1. What does it mean to take delivery of a derivative contract?

    Find out more about derivative contracts and what it means when the holders of derivative contracts take delivery of the ... Read Answer >>
  2. What is a wild-card play?

    A wild-card play is a term related to futures contracts. A future is a financial contract obligating a buyer to purchase, ... Read Answer >>
  3. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
  4. What does the underlying of a derivative refer to?

    Find out more about derivative securities, what an underlying asset is and what the underlying assets refer to in stock options ... Read Answer >>
  5. How do futures contracts roll over?

    Learn about why futures contracts are often rolled over into forward month contracts prior to expiration, and understand ... Read Answer >>
  6. What happens to the voting rights on shares when the shares are used in a short sale ...

    The registered owner of the security, known as the holder of record, is the investor who retains voting rights. This means ... Read Answer >>
Hot Definitions
  1. Poison Pill

    A strategy used by corporations to discourage hostile takeovers. With a poison pill, the target company attempts to make ...
  2. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  3. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  4. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  5. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  6. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
Trading Center