FORWARD CONTRACTS

abhishreshthaa

New member

Forward contracts
All contracts in commodities providing for delivery of goods and/or payment of price after 11 days from the date of the contract are "forward" contracts.


Forward contracts are of two types -

"Specific Delivery Contracts" and

"Futures Contracts".



Specific delivery


Specific delivery contracts provide for the actual delivery of specific quantities and types of goods during a specified future period, and


in which the names of both the buyer and the seller are mentioned.



Futures contract

A futures contract is a type of "forward contract". FCRA defines forward contract as "a contract for the delivery of goods and which not a ready delivery is contract".


The term 'Futures contract' is nowhere defined in the FCRA. But the Act implies that it is a forward contract, which is not a specific delivery contract.


However, being a forward contract, it is necessarily "a contract for the delivery of goods".


A futures contract in which delivery is not intended is void (i.e., not enforceable by law), and is, therefore, not permitted for trading at any commodity exchange.
 

jiten005

Banned

Forward contracts
All contracts in commodities providing for delivery of goods and/or payment of price after 11 days from the date of the contract are "forward" contracts.


Forward contracts are of two types -

"Specific Delivery Contracts" and

"Futures Contracts".



Specific delivery


Specific delivery contracts provide for the actual delivery of specific quantities and types of goods during a specified future period, and


in which the names of both the buyer and the seller are mentioned.



Futures contract

A futures contract is a type of "forward contract". FCRA defines forward contract as "a contract for the delivery of goods and which not a ready delivery is contract".


The term 'Futures contract' is nowhere defined in the FCRA. But the Act implies that it is a forward contract, which is not a specific delivery contract.


However, being a forward contract, it is necessarily "a contract for the delivery of goods".


A futures contract in which delivery is not intended is void (i.e., not enforceable by law), and is, therefore, not permitted for trading at any commodity exchange.

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