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Posted On: 09/12/2019 10:03:07 AM
Post# of 27324
Gray Market Explained
In gray market trading, while the trade is binding, it cannot be settled until official trading begins. This may cause an unscrupulous party to renege on the trade. Due to this risk, some institutional investors, like pension funds and mutual funds, may refrain from gray market trading.
The gray market for goods thrives when there is a significant price discrepancy for a popular product in different nations. In many nations, there is a substantial gray market for popular consumer devices and electronics because these can be easily purchased online and shipped to any location. Other popular gray market products include luxury cars, high-end apparel, handbags and shoes, cigarettes, pharmaceuticals, and cosmetics. Unauthorized dealers may import such items in bulk and, despite adding a healthy mark-up, sell them at a price still well below the local cost.
In gray market trading, while the trade is binding, it cannot be settled until official trading begins. This may cause an unscrupulous party to renege on the trade. Due to this risk, some institutional investors, like pension funds and mutual funds, may refrain from gray market trading.
The gray market for goods thrives when there is a significant price discrepancy for a popular product in different nations. In many nations, there is a substantial gray market for popular consumer devices and electronics because these can be easily purchased online and shipped to any location. Other popular gray market products include luxury cars, high-end apparel, handbags and shoes, cigarettes, pharmaceuticals, and cosmetics. Unauthorized dealers may import such items in bulk and, despite adding a healthy mark-up, sell them at a price still well below the local cost.
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