What does Cash Commodity mean?
An actual physical commodity which is traded. Someone buys or sells for physical delivery. The contracting parties agree for delivery of actuals, a set quantity and quality of the underlying commodity at pre-decided price on a specified date. So when the Commodity transaction happens the future price is decided and the commodity is traded, and at the end the actual commodity is exchanged. Example of the Cash Commodity can be – Gold, Silver, Crude Oil, and Treasury Bonds.
Futures Knowledge Explains Cash Commodity
Cash Commodity is the commodity which is traded and has to be actually delivered in physical form at the end of a particular future transaction. Cash commodity is actually a physical commodity underlying a contract. This can be a commodity such as gold and oil or a financial instrument such as shares and bonds. Cash commodity is traded on the futures market for delivery at the completion of the contract.
A cash commodity is also known as actuals.
