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Implications of futures contracts ban on select commodities -Suresh P Iyengar

-The Hindu Business Line

Here is the BL Explainer on futures trading ban on select commodities, its benefits, controlling prices, and experts take on it.

* What is futures trading?

Futures trading is an agreement between two people to buy or sell a commodity at an agreed price on a future date. As per futures contracts traded on an exchange, one party consents to buy a given quantity of commodity with specified quality and take the delivery on a specific date. A seller has to deliver the commodity. The exchange, which collects the requisite margin, guarantees for the quality of goods and financial commitment. Except for cash-settled energy contracts, all futures contracts are settled through delivery on the expiry of the contract.

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