Chapter 4Trading Essentials

This chapter describes terminology related to trading and forward prices, and introduces the groups involved in trading at an institutional level.


After completing this chapter, the student should have an understanding of

• Trades and trading positions

• Features of commodities

• Different types of prices

• Types of groups involved in trading organizations

Trades and Positions

A trade is a transaction. It is a legally binding contract that involves the buying and selling of some type of good. The people who are transacting are called the parties to the transaction. From the perspective of either party, ...

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