Delivery Date
Categories: Company Management, Metrics
While commodities trading may be highly leveraged speculation excitement for those in the futures or forwards market, it's important to remember that, ultimately, commodities trading is a physical market, and that actual commodity products that underscore those futures contracts are subject to physical delivery. As many commodities are agricultural in nature, they may be subject to environmental and weather cycles that dictate sowing and reaping schedules.
The Delivery Date is the date by which the actual contract holder must have the contract in their possession if holding it to maturity and subsequent delivery. In general, trading stops a couple of days before the last date for delivery. Futures contracts, traded on an exchange, often will be closed out with an opposing contract which nullifies the open position, as much of futures trading is speculation.
In the case of forward contracts, physical delivery is often a reality, as they are traded in an over-the-counter market by actual producers and buyers as a pricing hedge.
And no, this has nothing to do with whatever the OB/GYN just told you.
Related or Semi-related Video
Finance: What is Delivery Vs. Payment?63 Views
Finance a la shmoop what is delivery versus payment? alright this is delivery [Man delivering package to man and woman]
and this is payment and this is what happens when the whole thing fails to go
off without a hitch yeah and yeah some poor dock worker
who's gonna have to clean all that up well when it comes to selling stock
there's typically less bloodshed but it's no less important to make sure that [Stock delivery appears at door]
delivery of the goods in this case maybe it's a hundred shares of get-rich-quick
com happen simultaneously with payment for those goods or at least so that the
payment is trackable with the delivery well delivery versus payment or DVP for
anyone who's in a hurry is from the perspective of the buyer if you're
looking at things from the seller's point of view it's RVP receive versus
payment because you're receiving the dough or the payment got it [Seller and Buyer appear]
but yeah DVP is basically a settlement system it's a way of ensuring that any
transaction involving the sale of a security goes smoothly so that no one
needs to have rocks tied to their ankles no cash no stash and no splash so why do [Person moving with rock attached to ankle]
we have delivery versus payment like why is this even a thing well you could
imagine in the past that people were paying for things that didn't exist like
they thought they were buying 100 shares of whatever.com they paid the broker and
while the shares disappear the broker disappeared everyone disappeared and oh
well money's gone so what happens today is there was typically a lag in what's
basically a mini escrow account where the money sits for a few days t plus 3 [Money appears in a vault and clock ticks]
it used to be t plus 5 being sure that the seller actually had legal title to
the shares that they were selling to you and that your money was in fact good and
not Somalian warlord laundered money or at least easily identifiable Somalian
warlord laundered money that's why there's a lag and that's why delivery
versus payment has kind of two separate steps got it get it good! stay out of the water... [Man kicks other man into water]