5.3. 1 The financing delivery shall be completed within fifteen working days after the effective date.
5.3.2 Within seven working days after the completion of financing delivery, Party B shall confirm the completion of financing delivery to Party A in writing, and submit copies of all signed financing documents and any other documents reasonably required by Party A to prove that financing delivery has been realized.
5.3.3 If Party B fails to complete the financing delivery within 15 working days after the effective date, or fails to prove to Party A that the financing delivery has been completed within 7 working days after the completion of the financing delivery, and it has not been completed within 30 days after Party A's request, Party A has the right to redeem the performance bond or confiscate the negotiation bond.
In fact, delivery and financing are two independent terms.
Transaction Process-Delivery
Concept and function of physical delivery
Physical delivery refers to the process that when a futures contract expires, both parties to the transaction settle the expired open contract by transferring the ownership of the goods contained in the futures contract.
Commodity futures trading generally adopts the physical delivery system. Although the proportion of final physical delivery of futures contracts is very small, it is this very small amount of physical delivery that connects the futures market with the spot market and provides an important prerequisite for the function of the futures market.
In the futures market, physical delivery is an institutional guarantee to make futures prices and spot prices tend to be consistent. When the futures price seriously deviates from the spot price due to excessive speculation, traders will arbitrage between the futures and spot markets.
When the futures price is too high and the spot price is too low, traders sell futures contracts in the futures market and buy goods in the spot market. In this way, the spot demand increases, the spot price rises, the supply of futures contracts increases, the futures price drops, and the spot price difference narrows;
When the futures price is too low and the spot price is too high, traders buy futures contracts in the futures market and sell goods in the spot market. In this way, futures demand increases, futures prices rise, spot supply increases, and spot prices fall, making spot spreads tend to be normal.
The above analysis shows that through physical delivery, futures and spot markets can achieve mutual linkage, and futures prices eventually tend to be consistent with spot prices, so that futures markets can really play the role of price barometer.
Some hedgers who are familiar with the spot circulation channels, in actual operation, directly throw or buy the spot in the futures market according to the relevant information of the spot market to obtain the price difference.
This on-call approach eliminates the risks brought by various non-price factors to a certain extent, and objectively plays a role in guiding production and ensuring profits.