FAQs

NASHLX is an electronic trading platform that serves as a spot and forward market for direct transactions between sellers and buyers, both domestic and international, of hardwood lumber and other forestry commodities.

Any seller of hardwood lumber as well as other forestry commodities, and their representatives may sell on NASHLX. Softwood lumber is not yet supported on NASHLX.

Any buyer of hardwood lumber and other forestry commodities, or their respective representatives, may buy on NASHLX. Softwood lumber is not yet supported on NASHLX.

Buyers and sellers of hardwood lumber and other items need NASHLX for several reasons.  First, NASHLX spot and forward markets solve the coordination problem between buyers and producers of hardwood lumber and other forestry commodities.  Second, the industry needs a well-functioning price mechanism that automates the generation of well-informed and well-designed spot and forward bulk prices at which a buyer and seller can transact.  Third, the industry needs a forward market that enables hedging of price risk of hardwood lumber and other forestry commodities that are not served by futures exchanges.

Yes, one can list a variety of forestry products to sell.

In general, both buyers and sellers pay a small percentage of each transaction to NASHLX. For buyers, the range is between 1.0% and 1.5%. For sellers, the range is between 2.25% and 3.0%.

In the spirit of financial markets that enable double auctions where both buyer and seller submit bids at which to transact in standardized contracts, assets or commodities, NASHLX enables a participant to make a sequence of offers to transact. Specifically, a seller submits an offer to sell, and a buyer submits an offer to buy. Each offer is a non-binding signal of its desired terms, which NASHLX uses as inputs to a matching algorithm that presents pending agreements that like-minded parties can accept, cancel or counter through a series of binding offers and counter offers.

In making a non-binding offer to buy, the buyer signals to NASHLX a desired unit price, maximum quantity demanded and delivery terms. Likewise, in making a non-binding offer to sell, the seller signals to NASHLX a desired unit price, a desired quantity for sell, and desired delivery terms, including the maximum distance it is willing to travel in order to make a delivery. From here, the NASHLX Matching Mechanism and Price Mechanism take over.

The NASHLX Matching Mechanism automates the execution of pending agreement whose terms the parties finalize through binding offers, and the price mechanism automates the generation of market prices.

The NASHLX Price Mechanism is a mathematical framework derived from economic theory that implements an equilibrium outcome of a series of transactions whereby several profit-maximizing sellers, or farmers in our case, post non-linear, or bulk, prices to a buyer whose well-being depends positively upon two things: (1) consuming commodities and (2) having as much of its revenue as possible left over after having purchased commodities.

This all happens within fractions of a second, automating the execution and settlement of win-win transactions for both buyers and sellers of hardwood lumber.

There is no minimum size requirement for a mill on NASHLX.

No, a mill is not obligated to sell listed lumber on NASHLX. The mill can cancel or allow the listing to expire. The only time a mill is required to sell its lumber through NASHLX is if the mill entered into a contract through NASHLX.

A seller makes an offer to sell a particular type of lumber and a buyer makes an offer to buy. NASHLX algorithms suggest a price-quantity pair that benefits both sides, over and above their stated price-quantity preferences. The buyer and seller can then decide to agree to terms, or negotiate, based on quantity, price and distance. If an agreement is reached, NASHLX generates a standard contract. This contract can be either spot or forward, depending on whether the delivery date is within 30 calendar days.

Once a buyer accepts the product and the contract is fulfilled, NASHLX invoices the buyer. The buyer pays NASHLX in a timely manner based on the contract between the buyer and seller, and then NASHLX pays the seller if the buyer paid by check. If a digital means of funds-transfer was made, then the seller receives its funds directly from the buyer.