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Cash Contract

A cash contract is a contract between a buyer and seller (no middleman) that includes the delivery of a certain amount of a certain something on a certain date.

For instance, one pallet of peanut M&M’s on your doorstep, tomorrow, agreed upon between you and Mars, Inc.

What’s the difference between cash contracts and futures contracts? Futures contracts go through clearing houses, and with the goal of making money off of speculating price changes over time. Cash contracts are between two parties, and are dealing with the actual goods as the end-goal, not profits.

Because you don’t care about profits. You just want your peanut M&M’s, stat.

Find other enlightening terms in Shmoop Finance Genius Bar(f)