What is a Cash Commodity?
” Different from a futures commodity, a cash commodity is a physical asset that is being purchased or sold, with payment rendered immediately. Ownership of a cash commodity is transferred upon receipt of the payment. In some markets, a cash commodity is referred to as actuals. . The underlying premise of the cash commodity is not the same as a futures commodity. With futures, the goods or securities are purchased or sold with the stipulation of future delivery.
Different from a futures commodity, a cash commodity is a physical asset that is being purchased or sold, with payment rendered immediately. Ownership of a cash commodity is transferred upon receipt of the payment. In some markets, a cash commodity is referred to as actuals. The underlying premise of the cash commodity is not the same as a futures commodity. With futures, the goods or securities are purchased or sold with the stipulation of future delivery. This usually works out fine for the buyer and seller, as the seller does recognize immediate benefit from the sale, and the buyer is free to put the security or asset up for immediate sale without having to wait for actual possession to take place. Often, investors engage in the execution of a futures contract with the intent of making a quick profit from turning over the asset. With a cash commodity, there is no deferred period before delivery of the good or security. Possession is often held for a period of time before another sal
