Approved Delivery Facility

  

Categories: Derivatives, Trading, Charts

Much of the futures trading you hear about is done as speculation. A futures contract guarantees delivery of a certain commodity at a certain price at a certain point in the future. So oil for June delivery at $55 a barrel.

But a lot of the trading (at least the kind that you see in movies, where agitated bros in Armani suits guzzle red bull and yell things across crowded trading floors and slam their terminals against their desks) represents a bet on where oil prices are going, not an actual attempt to procure oil.

However, there are people who are actually trying to get oil. For those people, there exist approved delivery facilities. These locations represent the place where the commodities get delivered when a futures contract is executed.

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