LEVERAGE CONTRACT

leverage contract.An agreement for the purchase or sale of a contract for the future delivery of a specified commodity, usu. silver, gold, or another precious metal, in a standard unit and quantity, for a particular price, with no right to a particular lot of the commodity. • A leverage contract operates much like a futures contract, except that there is no designated contract market for leverage contracts. The market sets the uniform terms of a futures contract. But in a leverage contract, the individual merchant sets the terms, does not guarantee a repurchase market, and does not guarantee to continue serving or acting as the broker for the purchaser. Leverage contracts are generally forbidden for agricultural commodities. 7 USCA § 23(a). Cf. FUTURES CONTRACT.[Cases: Commodity Futures Trading Regulation  10.C.J.S. Securities Regulation §§ 455, 470.]

[Blacks Law 8th]