Minimum Price Contract

What is Minimum Price Contract?

Minimum Price Contract meaning A hybrid commercial forward contract for agricultural products that includes a provision guaranteeing the person making delivery a minimum price for the product. For agricultural commodities, these contracts became much more common with the introduction of exchange-traded options on futures contracts, which permit buyers to hedge the price risks associated with such contracts.

 

reference: U.S. COMMODITY FUTURES TRADING COMMISSION – CFTC Glossary

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