We just love futures. Not the tea-leaves-and-crystal-balls kind of futures, though those are, um...neat in their own right...but the investing-in-commodities kind of futures. And, hands down, our favorite commodity is corn. But just because we like investing in corn futures, that doesn’t mean we necessarily want to take delivery of a shipping container full of corn when we buy a corn futures contract. Seriously, what would we do with all that corn? Which is why it’s so great that retenders exist.
Usually, we can just sell a long futures contract before it expires and avoid the whole physical-delivery issue altogether. But if we don’t sell before that magical date, we’ll receive a notice of delivery, which means the corn is...coming. A “retender” happens when we sell the delivery notice for the underlying asset tied to our futures contract. In plain English, this means that we don’t have to take physical possession of the corn because we’ve sold the actual corn delivery to someone else. Which is good, because we’re pretty sure our HOA has rules against having huge crates of corn in our driveway.
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Econ: What is Legal Tender?0 Views
And finance Allah shmoop what is legal tender and no
it's not an official great of meat like this Filet
is legally tender but I still can't cut it And
it's not the name of a magazine that will get
you on an FBI watch list if you subscribe to
it either Legal tender refers to money like the dollars
and cents you have in your pocket that's legal tender
the actual bills and coins that allow you to buy
stuff Yeah that's legal Tender legal tender is a medium
of exchange that's been recognized by the government as thie
acceptable form of payment in that jurisdiction and old by
the way it's recognized by the people who accept it
as payment as well First medium of exchange While this
term refers to something that everyone accept is a form
of payment it's medium right It's shared by everybody kind
of in the middle It allows an economy to move
past the bartering stage of just trading beaver pelts for
bottles of Coke Think money of course but also think
gold or wampum or cigarettes in an old prison movie
Everyone recognizes value and so will trade goods and services
For the item It's a way to transfer in store
value so legal tender is a kind of medium of
exchange The legally accepted form of exchange right Those dollar
bills are the legally accepted form Well the government has
said In our country this will be the medium of
exchange So in the US it's dollars in the you
It's the euro In the UK it's the pound in
South Africa it's the rand and so on So you're
on a cruise ship that sinks way out in the
ocean You and some of the other vacationers wash up
on a desert island Everyone starts doing different jobs One
guy build shelters out of palm leaves and you know
some sticky stuff He scrapes off of rocks Other people
fish or catch crabs You know the crabs you could
eat You make a delicious drink out of coconut milk
honey and the fermented juice from a weird orange berry
you found growing in a cave At first people trade
things by barter This works but well only up to
a point To trade your coconut drink for food you
need to find a fisherman who wants some of what
you've got to offer If no one with fish wants
cocoa drink today Well no fish for you Well eventually
people start stringing seashells together to make special necklaces These
necklaces get traded for anything you want Now every time
you give someone your drink well you get a string
of shells You can then use the shelves to buy
fish It's no longer necessary to find someone with fish
who wants some cocoa Drink you Khun Sell the drink
to the shelter builder for a set of shells and
then use those shells to buy fish Right So what's
happened here The shells have become the medium of exchange
there The currency of the island Well after a while
you give up hope of rescue You decided to form
your own country You elect leaders Build yourself a palm
tree and rock blue Ah Parliament house First act turned
the strings of sea shells into official currency You make
them legal tender Well the island government now Khun regulate
the number of shell strings that get made the same
way The Federal Reserve in the Treasury Department print currency
and regulate the dollars that circulate through the economy You've
been selling out of coconut and you've built up quite
a pile of shells there You're getting rich Now if
you get rescued first step after a shower Of course
Check the foreign currency exchange market for the shell string
two dollar exchange rate and hope it's a good one
Yeah Don't do it right at the airport Wait till
you get into town You get a way Better deal
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A tender offer occurs when the government, or a large corporation, "tenderly" asks for bids, and then investors, uh... do their bidding.