Physical delivery
Definition · Level 7 · Futures, rates & macro
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Settlement by handing over the actual underlying — barrels of oil at Cushing for CL, gold bars for GC — to longs still holding when the delivery process starts (after the last trading day for CL, from first notice day for GC). Speculators close or roll well before.
Example
April 20, 2020: longs with nowhere to store oil paid to exit May WTI, which settled at −$37.63.
Rules and market figures change: check the current ones before relying on this.
Where Tradecraft teaches it
Level 7 · Futures, rates & macro, in the lesson “Futures: the contract”: Standardized contracts, month codes, notional and tick value: the specs every desk knows by heart.
Related terms
- CLNYMEX WTI crude oil future: 1,000 barrels, tick $0.01 = $10, monthly expiries, physically delivered at Cushing, Oklahoma.
- ESCME E-mini S&P 500 future: $50 × index, tick 0.25 = $12.50, quarterly H/M/U/Z expiries, cash-settled.
- Expiry (contract month)The month in which a futures contract settles, named by its letter code (Z = December).
- Futures contractExchange-traded, standardized agreement to buy or sell a set quantity of an asset at a price fixed today for settlement on a specific future date; a…
- GCCOMEX gold future: 100 troy ounces, tick $0.10 = $10, physically delivered.
- MESMicro E-mini S&P 500 future: one-tenth of the E-mini, $5 × index, tick 0.25 = $1.25.