Hi,
I am totally new to commodity trading and have a question on physical settlement vs cash settlement. I have some experience in share trading and was wondering if it's possible to completely do away with the hassles of physical delivery that comes with commodity trading. I use an online trading platform.
- If someone has failed to close his long position in a futures contract on the expiry of the contract, does he compulsorily have to accept physical delivery or is a cash settlement possible?
- In spot trading where delivery is compulsory after one day, can the commodity be bought in demat form as opposed to physical form? In particular, does the answer depend on the type of the underlying commodity (non-perishable like gold vs perishable like soyabean)?
What I would ideally like to do is to trade commodities the same way as I trade shares, i.e. sell it off when the price reaches a particular threshold, which might be 1 month, 3 months or maybe a year down the line. The physical delivery clause makes this kind of difficult to do.
Thanks.
I am totally new to commodity trading and have a question on physical settlement vs cash settlement. I have some experience in share trading and was wondering if it's possible to completely do away with the hassles of physical delivery that comes with commodity trading. I use an online trading platform.
- If someone has failed to close his long position in a futures contract on the expiry of the contract, does he compulsorily have to accept physical delivery or is a cash settlement possible?
- In spot trading where delivery is compulsory after one day, can the commodity be bought in demat form as opposed to physical form? In particular, does the answer depend on the type of the underlying commodity (non-perishable like gold vs perishable like soyabean)?
What I would ideally like to do is to trade commodities the same way as I trade shares, i.e. sell it off when the price reaches a particular threshold, which might be 1 month, 3 months or maybe a year down the line. The physical delivery clause makes this kind of difficult to do.
Thanks.