Cash Closeout
Definition
Cash Closeout. Closeout of the contract in the form of the cash equivalent of the asset or commodity rather than the underlying asset or commodity itself.
Issues and Challenges
Various SME REview notes from OTC sessions: This is where you go into the market and buy the offsetting contract. Exchange Traded: Standard process for exchange traded: if you have an open contract you close out the contract by taking the reverse contract, then present those contracts to the clearing house to be closed out. What clearing house? What is the relationship between the two partie sand the clearing house. That's for futures. What about OTC? Does this exist? Closeout does exist for OTC. For OTC. Terms of contract are that they are cash settled. Except maybe gold.
Disclaimer
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