Commitment

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Commitment

Describes a trader's obligation to accept or make delivery on a futures contract. Related: Open interest.

Commitment

1. The legal obligation to undertake an activity in a given way at a given time in the future. Usually, commitment refers to the requirement for parties to a futures contract to make or receive delivery of the underlying commodities on the expiration date of the contract.

2. A liability. A commitment is the obligation to make good on an agreement at some point. For example, a borrower makes a commitment to pay back a loan by a certain time.

commitment (loan)

An agreement by a lender to extend a loan on certain terms and conditions and by a certain date. Language making the “commitment” subject to credit approval or underwriting are not true commitments at all, but merely quotes.