What were the three bases that oil was sold on in the 1870s?

What were the three bases that oil was sold on in the 1870s?

• A. Spot; Regular; Futures
• B. Spot
• C. Regular
• D. Futures

Answer: (A)

In the early oil markets, price terms defined when delivery happened and how payment was arranged. The three bases used were the price for immediate delivery (spot), a standard price used for routine or regular trades (regular), and contracts to buy or sell at a fixed price on a future date (futures). Spot means you pay today and take the oil now, with the price tied to current conditions. Regular provides a baseline price that traders used for ongoing shipments, offering a predictable reference. Futures locks in a price for a future delivery, letting buyers and sellers hedge against price swings over time. Because traders in the 1870s oil market used these three distinct bases—spot, regular, and futures—the combination best describes how oil was sold then.

In the early oil markets, price terms defined when delivery happened and how payment was arranged. The three bases used were the price for immediate delivery (spot), a standard price used for routine or regular trades (regular), and contracts to buy or sell at a fixed price on a future date (futures). Spot means you pay today and take the oil now, with the price tied to current conditions. Regular provides a baseline price that traders used for ongoing shipments, offering a predictable reference. Futures locks in a price for a future delivery, letting buyers and sellers hedge against price swings over time. Because traders in the 1870s oil market used these three distinct bases—spot, regular, and futures—the combination best describes how oil was sold then.