Japan NIKKEI 225

[tokeprep]

I think you are missing the point. Gold Futures contracts are predicated on the fact that you should be able to get settled with Physical. After all selling something you don't actually own is the definition of FRAUD. SO if they are selling you the futures, there is the expectation that you can demand delivery, that's 1/2 how futures markets work. The real facts are that you cannot demand delivery, the custodian doesn't have what he is selling and no one can demand physical, check the prospectus.

The absence of physical settlement doesn't mean that physical settlement was impossible. Indeed, as you suggest, the contract with the exchange probably says "In the event of insolvency, the exchange will follow this procedure: blah, blah, blah." This is not evidence that there is nothing to physically deliver. Why use that procedure? I can think of good reasons. Maybe the exchange has some liability attached to delivery that could become a claim against its assets in bankruptcy; maybe they know that a lot of contract holders were just trading the contracts and don't want delivery; for all we know Chinese law says that a liquidating exchange must financially settle open positions.

You can't get delivery on a CBOT futures contract?

 

[NoDrama]

The absence of physical settlement doesn't mean that physical settlement was impossible. Indeed, as you suggest, the contract with the exchange probably says "In the event of insolvency, the exchange will follow this procedure: blah, blah, blah." This is not evidence that there is nothing to physically deliver. Why use that procedure? I can think of good reasons. Maybe the exchange has some liability attached to delivery that could become a claim against its assets in bankruptcy; maybe they know that a lot of contract holders were just trading the contracts and don't want delivery; for all we know Chinese law says that a liquidating exchange must financially settle open positions.

You can't get delivery on a CBOT futures contract?

If the contract says " Will be settled in physical or on a cash basis, according to the buyer" and you demand physical and they settle in cash. Contract has been breached, regardless if you could possibly convert the cash to the physical or not.

You need a remedial class on business law.

Did I say you can't get delivery of a CBOT Futures Contract? Is that what we are all of a sudden talking about now?

 

[tokeprep]

If the contract says " Will be settled in physical or on a cash basis, according to the buyer" and you demand physical and they settle in cash. Contract has been breached, regardless if you could possibly convert the cash to the physical or not.

You need a remedial class on business law.

Did I say you can't get delivery of a CBOT Futures Contract? Is that what we are all of a sudden talking about now?

You claimed that in reality you cannot demand delivery on futures contracts, which implies that most of them have this option you now mention, correct? What's your basis for asserting that most futures contracts are unlike CBOT futures contracts? I chose CBOT because CME Group is the largest futures exchange company in the world.

 

[Balzac89]

I'm hearing chatter that Gold is dropping because the ETFs are being redeemed in quantity.

Which makes sense.

 

[Balzac89]

Will the redemption of them accelerate as price drops? I feel gold might slide again. I read an article recently that made the case that Silver could drop to the next support level at $18