This paragraph covers the zero-rating that applies to certain transactions in commodities under SI 1973/173 (the Terminal Markets Order).
The Terminal Markets Order is a simplification measure for certain wholesale commodity transactions made by members on named commodity exchanges or market associations.
Types of commodity transactions—dealings on terminal markets (zero-rating)
A detailed account of commodity transactions is outside the scope of this division, and the following brief account of three particular forms of contract is given as a general background to the legislation described below.
Spot transactions
Goods may be sold for immediate delivery under a 'spot' transaction. This is known as actual physical trading, and the contracts are referred to as 'actuals' or 'physicals'. Actuals must be fully paid for, and are therefore more likely to be entered into for trading purposes than for investment.
Forward contracts
Goods may be traded under a 'forward' contract, which is referred to as a 'future' and is essentially a mechanism to protect against price future fluctuations. It is an agreement
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