A time-bargain refers to a future agreement to purchase or sell an item at a predetermined price. This commonly applies to commodities, stocks, or foreign currency. It involves committing to buy or sell an item at a specific price and date. These agreements are traded on specialized exchanges such as the Chicago Board of Trade or the Chicago Mercantile Exchange. They are also known as futures contracts.
A time-bargain is a futures contract that involves the buying or selling of a standardized asset, such as a commodity, stock, or foreign currency, at a predetermined price in the future. These contracts are traded on exchanges like the Chicago Board of Trade or the Chicago Mercantile Exchange. For instance, if a farmer wants to secure a fixed price for their wheat crop in six months, they can enter into a time-bargain agreement with a buyer. This ensures that the farmer is protected from potential drops in the market price of wheat. Similarly, a company can use a time-bargain to purchase a specific amount of foreign currency in six months to cover import costs. By doing so, the company can avoid fluctuations in the exchange rate that may increase the cost of their imports. In summary, time-bargains are valuable tools for managing risk and uncertainty in business transactions involving standardized assets.
A time-bargain is a type of futures contract where the buyer and seller agree to settle the contract at a specific time in the future, rather than on a specific date.
A regular futures contract has a specific delivery date, while a time-bargain has a specific settlement date.
A time-bargain allows for greater flexibility in terms of when the contract is settled, which can be beneficial for both buyers and sellers.
The main risk associated with a time-bargain is that the price of the underlying asset may change significantly between the time the contract is entered into and the settlement date.
The price of a time-bargain is determined by the market forces of supply and demand, just like any other financial instrument.
Yes, time-bargains can be traded on futures exchanges, just like regular futures contracts.
If one party to a time-bargain fails to meet their obligations, they may be subject to legal action and may be required to pay damages.
Yes, time-bargains are subject to regulation by government agencies and futures exchanges.
Individuals can trade time-bargains, although they may need to meet certain eligibility requirements set by the futures exchange.
Almost any type of asset can be traded as a time-bargain, including commodities, currencies, and financial instruments like stocks and bonds.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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