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Mon 20 Mar, 2017 03:03 am
Why the closing out position does not involve delivery of the underlying?
@Saverio310,
Because non-deliverable contracts when you've sold 5,000 LME Lead futures contracts with a March settlement at 25 ton a pop means you don't have to load your shipload onto the back of the pick-up truck when all you wanted to do was hedge the financial risk of your underlying exposure to the sale price when your ship comes in.
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