A contract for future delivery is an agreement to buy or sell a commodity at a specified future date. This type of contract is executed on a reporting market and follows the market's rules. It includes all agreements and transactions recognized as interchangeable by a clearing organization.
This term is commonly used in the context of commodity trading and futures markets. It falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC) and is relevant in areas such as finance and business law. Users may encounter this term when dealing with futures contracts, and they can manage related legal documents using resources like US Legal Forms.
Here are a couple of examples of abatement:
Example 1: A farmer agrees to sell a certain amount of wheat to a buyer at a fixed price for delivery in six months. This is a contract for future delivery.
Example 2: An investor enters into a futures contract to purchase crude oil at a set price, with delivery scheduled for three months later. (hypothetical example)
Major regulations governing contracts for future delivery include:
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Strict regulations on commodity trading practices. |
| Texas | Favors agricultural contracts and has specific provisions for local commodities. |
| New York | Home to many major exchanges; regulations focus on transparency and market integrity. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition |
|---|---|
| Spot Contract | A contract for immediate delivery of a commodity. |
| Forward Contract | A private agreement between two parties to buy or sell an asset at a specified future date. |
| Options Contract | A contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price before a specified date. |
If you are considering entering into a contract for future delivery, it is essential to:
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| Attribute | Details |
|---|---|
| Typical Fees | Varies based on the commodity and market conditions. |
| Jurisdiction | Federal and state regulations apply. |
| Possible Penalties | Fines for non-compliance with trading regulations. |
It is an agreement to buy or sell a commodity at a future date under specified terms.