Visible supply

Visible supply refers to the number of goods available to be bought or sold. In the context of finance, visible supply typically refers to the number of commodities available for trading.

Visible supply represents the amount of goods or services ready for sale. It is a volatile unit which decreases after every time a company’s goods are sold, and it increases every time a company increases its stock.

For example, if a company produces chocolate bars – its visible stock increases once the chocolate bar has been packaged and is ready for shipment. Consequently, the visible stock decreases at the moment that bar is purchased by a consumer in a grocery store.

This implies an important aspect – visible supply consists of both goods in storage and goods in transit. 

Visible supply is a notion commonly used in the context of futures trading. If there are deviations from the visible supply expected, it affects the futures price of a commodity. Namely, if there are indications of a shortage, it can result in increases in future prices.

Conversely, invisible supply refers to an unknown or unquantifiable amount of physical stock of a commodity that will eventually be available for delivery upon settlement of a futures contract.