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Advance Commitment |
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Advance commitment A promise to sell an asset before the seller has lined up purchase of the asset. This seller can offset risk by purchasing a futures contract to fix the sales price approximately. Advance Commitment A promise to undertake some activity before it is done. For example, a futures contract is an advance commitment to buy or sell an asset for a certain price at some point in the future. Likewise, in short-selling, one sells a security one does not own, and thus makes an advance commitment to buy it at some point in the future to ensure a smooth transaction. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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