How are freight futures and freight options different from stocks?
With respect to the above, the buying and selling of stocks is based on the spot market. You buy the stock. It is yours. You pay the seller. He takes your money – and each party goes about their way. With freight futures – you are buying something which will be delivered at a forward date. Therefore, someone must be obligated to sell it to you at that forward date. So – the seller doesn’t necessarily “walk away” once the deal is concluded. The seller must in fact stick around – in order to deliver the contract he promised to sell.
