Delivery Price

You've sold something. There was a price quoted. But who got what, upon delivery?

In futures trading, deliver price is the price set by a clearinghouse at which an underlying commodity is to be delivered to the holder of a futures contract upon expiration. The delivery price never fluctuates, because it's been written into the terms of the futures contract.

Say you think the price of pork bellies is going to rise. You purchase a futures contract agreeing to purchase 20 tons of pork bellies 90 days in the future at the price of 50 cents per pound. That 50 cents is the purchase price. If you're right and the price shoots up to 70 cents per pound in 90 days, you're a winner, because you locked in that delivery price and can make a 20-cent-per-pound profit. If not…well…hope you like pork bellies.