Deferred Price Contract

James D MacDonald, Janet Perry, Mary Ahearn, David Banker, William Chambers, Carolyn Dimitri, Nigel Key, and Kenneth Nelson ( September, 1999 )

Summary

A deferred price contract provides the seller the opportunity to deliver and transfer ownership on the contract date, but without setting a sales price. The buyer generally charges an up front or monthly fee. The producer retains the basis and futures price risk and opportunity in this contract until the sales price is determined.

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