TeachMeFinance.com - explain Short notice
Short notice -- Speculative dealings in commodities (grain,
cotton, coffee, etc.) are in certificates (warehouse receipts
which call for the actual property). On a future contract (a
contract calling for delivery of the commodity in a specified
future month) a certain number (according to the rules of an
exchange) of days' notice (called a regular notice) must be
given by the seller to the buyer of his intention to deliver the
commodity (that is, the certificate representing it) and collect
payment for it. This is when the future was sold without
When a future is sold without stipulation to the contrary
delivery is understood as being at the option (at the pleasure)
of the seller on regular notice to the buyer at any time in
the month in which the commodity becomes cash (is deliverable).
In a future at buyer's option the commodity is deliverable
on regular notice by the buyer to the seller.
When a broker buys a contract (accepts the transfer to himself
of the contract) upon which regular notice has been given,
but some part of which notice has elapsed, the notice has become
a short notice. A contract with a short notice is often
worth less in the market than one with a regular notice.
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