What Is a Trade Buyer?

Buyer's Call (Buyer 'Call) This is a basis trading method in which the buyer of the spot commodity determines the final transaction price. Generally, in the buyer's bargaining transaction, the seller of the spot goods is also the seller of the hedging. He has previously sold the hedging of the spot goods to be sold. For the seller, as long as the hedging ends, The basis difference is equal to or less than the basis difference at the beginning of the hedging, that is, the basis difference is constant or smaller, then he can achieve the purpose of hedging or make a profit.

Buyer bargain

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Although the futures market is profitable, due to the expansion of the basis, the profit of the futures market is not enough to cover the losses of the spot market. Since the basis has expanded by 50 yuan / ton, the remaining loss amounted to 50 yuan / ton. However, after the basis trade, no matter how inconsistent the spot price and futures price changes, regardless of any changes in the basis, since the two sides agreed to determine the price is "less than the futures price due in August 100 yuan / ton" The spot copper is sold, so the seller always ends the selling hedging transaction with a basis difference of -100 yuan / ton, so that he can get a perfect hedge effect.

As for the buyer of the spot copper, after making a basis transaction, he can only buy spot copper at a price of "less than 100 yuan / tonne due in August", that is, 15600 yuan per ton. The lower prices at the time were a downside. However, after doing a basis transaction, not only the spot copper source of the copper pipe factory is guaranteed, but also the right to choose the most powerful day to determine the final transaction price within 15 days, taking into account the possibility that the price may be There are changes that are not good for you, so this is another good side. ^[1]