Hey guys,
My first post here. I was looking at commodity trading and had a few questions if you guys here know.
Say you find a product in the US that costs $10, which you can sell for $15 in China.
IF we buy a 1000 of those are there any banks that can finance this deal for the intermediate trader?
In addition, what is a back to back LC and how does it work?
Thanks a lot guys!
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Ideally you should have a line of credit with your supplier and/or a bank which you would use until you get paid on the other side.
Back to Back means you have the buyer and seller lined up before the actual trade instead of buying the product and holding it until you figure out what you're going to do with it.
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