What are Contract Grades?
Contract grades are standards that are associated with various types of investment commodity situations. Essentially, the contract grade helps to establish the status of a futures contract based on a given commodity as being deliverable within the terms outlined in the contract. Contract grades help to ensure that investors who deal in commodities get what they pay for. Contract grades or standards are usually established on two fronts. First, the government of jurisdiction where the particular commodities exchange is located will provide relatively broad rules and regulations that apply to any commodity traded on the market. In addition, the actual market or exchange will also have some input into whether or not a given commodity offering meets the standards for trading set by the exchange. In both instances, the intent of the laws and regulations is to establish contract grades that are reasonable, help to represent the underlying value of the commodity realistically to potential inv
