Introduction to Contracts

Trades of Aluminum on Mineral and Industrial Trading Floor of IMEIME trades 24k tons of petroleum products in one day - Mehr News Agency

 

Types of Tradable Contracts in IME

 

Part one- Physical Market

The physical market of the IME is the trading platform for physical commodities like steel billet, bloom, rebar, beam, tin plates, hot-rolled coils, cold-rolled coils, galvanized color sheets and steel slabs which are traded in the Industrial Trading Floor of the exchange together with gold bar and iron ore . Copper cathode and wires as well as aluminum ingots, aluminum billets and alloys are also traded in this floor together with zinc and lead.

Numerous types of polymers like LLDPE, PVC, ABS, styrene, poly-styrene, polypropylene, PET and chemicals like caustic soda, glycole, ethylene, argon, terephthalic acid and other petrochemicals are traded in the Oil and Petrochemical Trading Floor of the exchange which is also the venue for trading of lube cut, vacuum bottom, bitumen and base oil.

 

Based on settlement and delivery maturities, spot trade fall in  following categories:

 

1-Cash Contract 

In this type of contract, the buyer is obliged to settle the trade value in three working days from matching of trade, and the seller is required to deliver the commodity promptly in 10 calendar days from trade. 

 

2-Physical Forward Contract

In this type of contract, trade settlement is done by buyer like cash contract yet the seller will remain committed to deliver the product at a maturity ( normally 45 days) stated in the offering notice prior to trade. This type of contract is considered as a financing tool for manufacturing units that receive the total price of the commodity in advance but at a discounted rate compared to normal cash trades.

 

3-Credit Contract

Here, the seller deliveres the underlying like the cash contract to the buyer, but will be paid in a maturity stated in the offer notice. This type of contract is considered as a financing instrument for downstream manufacturers who produce a semi-finished or a finished product with the raw material purchased from the exchange. They pay the trade value at the maturity at rates that are higher than the normal cash trades i.e. a premium on normal price.

 

In all transactions of the exchange, the clearing house manages the settlement and delivery to the benefit of all trade sides. The clearing house ensures comitments of seller and buyers through collateral management both in physical and derivatives trades.

 

 

Sub-divisions of the Physical Market

 

 

Side Market

 

Tender Market

 

Premium Trade Platform

 

Real Estates


 

Commodity ETFs

Commodity funds are financial instruments available for traders who have exposures or interests in commodities. They are low risk investment tools as well. Exchange-traded commodity funds are one of the pioneering and effective trading instruments of our exchange. Commodity ETFs assist in regulating the agricultural market price of crops and products. They generally help broaden the spectrum of risk management products. Increasing the financial literacy of farmers is the other feature of such instruments while the commodity funds can turn agriculture market to a lucrative trading option for investors. They are trusted gadgets for a risk-free investment in the international capital market. Many of the international and multi-national commodity trade corporations buy and trade fund units in order to both mitigate their risks and gain from investments. Diverse range of underlying commodities in the commodity funds ensures a liquid market for investors of variety needs with a guaranteed profit.

 

 

 

 

 

Top Subjects | All News

 

IME Sold 9 Million tonnes of Commodities within a Month

IME Monthly Report

IME Sold 9 Million tonnes of Commodities within a Month

Within the month ending on September 22, 2022, the IME witnessed trade of 9,857,062 tonnes of commodities with a total trading value of more than 2.4 billion USD on its physical market, as compared to the month before.

Cara Pickup Automobiles Traded on IME

Saturday

Cara Pickup Automobiles Traded on IME

On Saturday, September 24, 2022, the IME played host to trading of 137 Cara Pickup cars (regular and extended cab) on its metals and minerals trading floor.

IME Touched Higher Records in Value and Volume of Trades

IME Weekly Report

IME Touched Higher Records in Value and Volume of Trades

Within the week ending on September 23, 2022, the IME witnessed trade of 3,023,000 tonnes of commodities with a total trading value of nearly 765 million USD, posting growths of 18% in volume and 25% in value of trades compared to the figures of the previous week.

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Tuesday, September 27, 2022 22:43

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