Delivery Instrument
Categories: Company Management, Metrics
Receipts are always important to prove ownership, and provenance is the key to final transactions. Whether it's lingerie purchased at Victoria’s Secret, a new Porsche from the auto dealer, or the Whopper with fries at Burger King, receipts are critical for establishing ownership rights, so that you can choose to give the lingerie to a significant other, register the Porsche with the DMV, or give the Whopper and fries to your kid. Without the receipt, someone could contest your rights.
While the majority of people trading the commodity futures market are speculators, there exist actual commodities, either in storage somewhere or en route to a delivery port that underlie those contracts.
A delivery instrument is a shipping receipt, warehouse receipt, or comparable document that is given to the futures contract holder, who has the choice to take delivery and exercise the contract...or sell the contract and transfer ownership accordingly.
Related or Semi-related Video
Finance: What is Good Delivery?11 Views
Finance allah shmoop What is good delivery All right Well
here's bad delivery You have been there if a security
that's traded on an exchange meets the requirements toe permit
it to be transferred from seller to buyer While then
the transfer is said to be of good delivery When
it happens legal transfer happens with no hiccups and well
life is good But on the other hand if a
share of stock is say restricted as in a one
forty four a type situation so that it cannot be
transferred Well then good delivery of this share cannot be
realized Recall that a one forty four a restriction is
a common provisions that insiders like early investors and management
and founders of a recently i po'd company fall under
that is for a six months and change after the
company was first taken public they are restricted from being
able to transact in there stock They couldn't sell it
And nobody could take good delivery of those shares Well
why would there be a provisioned for good delivery in
the first place Well you can imagine that before the
various regulatory bodies took hold in america there was all
kinds of room for fast talking city slickers to sell
no value Floor tiles of blue sky too ignorant farmers
who really didn't know what they were buying or that
various legal hoops had to be jumped through first So
good delivery actually became a hurdle that brokerages and their
clients had to pay attention to And well let's hope
they get it better Then this ups guy We're still 00:01:29.509 --> [endTime] angry about our glasses Yeah