Cost of Tender

It's the third Friday in December. You’re at the Chicago Board of Trade, staring into a trading monitor. You’ve forgotten that you’re holding 15 contracts for December corn, and you realize that it’s time to deal at expiration.

So you’re about to take delivery of 75,000 bushels of corn in the middle of winter, and that stuff has to go somewhere. Your delivery and certification fee associated with this purchase is called “the cost of tender.” The cost of tender is the cost of “taking care of business,” and includes carrying costs, transportation, and other delivery expenses.