In order to both minimize the default risk in times of low spot prices and meet the customer’s liquidity needs in times of high spot prices, MGRM included in its contracts a cash-out option. In times of high spot prices, customers could call for cash settlement on the full volume of outstanding deliveries over the life of the contract, thus receiving a cash infusion exactly when they were otherwise liquidity constrained. Under the firm-fixed contracts the customer would receive one-half the difference between the current nearby futures price and the contract price, multiplied by the entire remaining quantity of deliveries. Under the firmflexible contracts the customer would receive the full difference between the second-nearest futures price and the contract price, multiplied by the portion of deliveries called.3