Can You Really Make Money Trading Commodities Online? Un-Legalese-ing The FCO 3
Buyer's Bank must send a Commitment and Proof of Funds Letter to Seller's Bank via Telex. Seller's Bank must send a Proof of Product by Telex to Buyer's Bank
Well, these days Telex has gone the way of the dodobird, but there are other ways to get the documents across. Regardless, the bank that deals with the buyer has to tell the bank that deals with the seller "Hey, this dude has the cash, we're not pulling a scam" and the bank that deals with the seller has to tell the bank that deals with the buyer "Hey, this dude really has the stuff, it's his to sell, and it's ready to get loaded up and outta here."
along with TWO PERCENT (2%) Non Operative Performance Bond.
This is sticky wicket time: A Non Operative Performance Bond is often applied to make sure that both the buyer and the seller do exactly what they said that they would do under the terms of their contract. In the case that one of them screws up and doesn't meet the terms of the agreement then the bond will be used to compensate the other party which has been negatively impacted. There are a zillion reasons why Non Operative Performance Bonds are applied and even actually paid out. Yes, I believe you're starting to catch on that not all of these deals go smoothly and not all of these deals even conclude with anything but people screaming at each other. Yup. That's life. This is a tough business. You've got to have a tough hide, and be able to tough it out! This is not a business for the mild mannered goody two shoes. After all, a Non Operative Performance Bond of two percent on $50 million is one cool million bucks. When you're talking about tens or hundreds of millions of dollars hopping around the planet you can be damned sure that not only if anything can go wrong it will, but that there are many people all over the world who are staying up at nights trying to figure out ways to get their greedy little claws on it!
5) Buyer's Bank Issues the L/C and activates the Prime Bank Guarantee to Seller's Bank. The Buyer's L/C Activates Seller's TWO PERCENT (2%) Performance Bond.
If we've gotten this far, then the Non Operative Performance Bond are posted, and everything is flowing well. I hope you have a big piece of wood that you're knocking on nonstop until the deal consummates.
6) Buyer and Seller Follow Procedures as per Final Contract.
It's done. Now you can breathe for the first time in weeks. Deal is finalized. Your check is on the way!
SELLER GUARANTEE: After Acceptable Workable L/C, Seller will issue Shipment Guarantee verified and sealed by a Certified Notary Public.
All this says is that the guy who is selling the stuff will issue a document guaranteeing the shipment which is certified by a Notary Public... which has to be one of the few reasons why Notaries Public even exist. It's a charming and completely otherwise useless profession from an earlier age.
Now... If you have this form signed, sealed, and delivered you can now start figuring out what you're going to spend your commission windfall on. You're nine tenths of the way to cashing the cheque! But keep in mind that the process has to consummate in its entirety. And not all of them do!
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