The great bulk of " futures," however, are bought back and not delivered against.
Thus if a person holds futures for 10,000 bales which stood at 5.20 on the last settlement day and now stand at 5.30, and in the course of the previous week has sold 5000 bales of " futures " at 5.1 o, he receives 10,000 X - i ce o d.
As soon as the clearing house was set up it became evident that " futures " were an impossibility away from it.
At the same time of " futures " were becoming an increasing necessity to Origin Liverpool importers, because through " futures " alone could they cotton hedge on their purchases of cotton, or buy when the Associa- market seemed favourable, and they were not prepared tion .
Now from the clearing house importers were rigorously excluded, and on invoking the aid of " futures," therefore, they were penalized to the extent of double broker's commission, one commission being charged on the sale of the " futures " and one on their purchase back.