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ANPL Commodity Exchange


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3: What is "Delivery Based Future Trading"
Technically, in any commodity trade scenario, trade usually takes place in following two ways:
Futures Trading : In this type of trade, the buyer and seller enter into a contract for the commodity that would actually be available after few months.
Drawback: Usually the contract once bought is again made available for trade (and this continues until the delivery time of the commodity is reached), this increases the price of the commodity abnormally and the contract buyer defaults at the end (most of the time).
Spot Trading :In this type of trading, the commodity that is being traded is actually available. Rates are quoted and after agreement between both the parties the commodity is picked up or delivered and the payment is made.
Drawback:This type of trade is restricted to physical boundaries.
Delivery Based Futures Trading : This is same as futures trading except that once the contract is sold, it is not available for further trade. Hence, the contract takes place between the actual seller and the actual buyer. Furthermore, the trade is not restricted under the physical boundaries. ACX has adopted this type of trade to take place on its platform.
Benefit : It provides the opportunity to do trading beyond the physical boundaries and at the same time the cost benefit can be shared between the seller and the buyer.

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