Derivatives of futures trading on the COMEX or some other exchange accounts for 80% of total contracts. They usually close out or expire worthless. However, the basics of future contracts on commodities dates back centuries, and has been tied to physical deliveries. The dealer option is a futures contract traded over the counter, and is usually designed to be a price hedge for a buyer and a seller against future fluctuations in the market. The futures contract is made for 3 months or more based on a price that is off market. If the market price at the date of expiration is below that of the contract, the seller keeps the premium. If the price is higher, than the buyer executes the contract and the seller provides the commodity for delivery.
The fluctuation of wheat prices affects many staples and foods, from breads and rolls to pizza, noodles and cakes. Companies that prudently utilize dealer option contracts are able to maintain or incrementally modify prices for their wheat-based goods, and pass them on through the supply chain. Those that don’t...run the risk of being squeezed between rising costs and keeping prices competitive with their competition. However, when the pizza parlor or bakery raised prices by 25-30% overnight, that’s probably just price gouging.
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Finance: What is a Broker-Dealer?16 Views
Finance a la shmoop.. what is a broker-dealer? It's one of [Homeless guys holding help signs]
these guys who's making less than minimum wage right no that'd be a broke
dealer and you won't find too many of them in Lake Tahoe but yeah a broker is [Man talking about broker-dealers in Lake Tahoe]
just someone who takes a commission for selling stuff they live wherever there
are transactions in cars, boats, planes, homes and securities like stocks and
bonds so yeah it's a broker - dealer sort of like a writer-director
sexual deviant in Hollywood... Key takeaway here the broker dealer brokers
securities ie they take a commission and they deal in securities like they carry [People playing blackjack]
their own inventory of ten million shares of Amazon this week's selling
them for twelve hundred ninety dollars and 32 cents a share and buying them for
twelve hundred eighty eight dollars seventy nine cents a share making a
spread of...
equals a dollar fifty-three a share the dealer makes a spread of a buck fifty [Dealer and market transferring cash and stock]
three every time she trades a share of the Walmart killing behemoth yeah it's
sort of a Goliath slaying Goliath story there that Amazon Walmart thing we're
watching it so think about broker-dealer making money on both sides of the trades
that's the way to go if you're going to Wall Street make money no matter what [Man walking on Wall Street]