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Futures delivery refers to the process that when a futures contract expires, both parties to the transaction settle the expired open contract by transferring the ownership of the goods contained in the futures contract. There are two ways of delivery: cash delivery and physical delivery. General financial securities futures contracts are mainly cash transactions, and commodity futures contracts are mainly physical delivery.
Cash delivery refers to the profit and loss accounting of the difference between the buying and selling price of both parties and the settlement price on the expiration date on the expiration date of the contract, and the profit and loss are respectively settled with the counterpart, and the target physical delivery is not involved during the period; Physical delivery refers to the expiration date of the contract, when the seller delivers the corresponding goods to the delivery warehouse designated by the exchange according to the quality and quantity, and the buyer delivers the corresponding money to the exchange to fulfill the futures contract.
In the futures market, commodity futures are usually delivered in kind, while some varieties in financial futures are delivered in kind and some are delivered in cash. Cash delivery does not take physical delivery, but only takes the spot price at the time of delivery as the basis for trading profit and loss and fund allocation.
Therefore, the spot price of cash delivery varieties should have the characteristics of certainty, and it is standard and unique. The regional price difference of agricultural products is very obvious, and it does not have the conditions for cash delivery. The trading target of stock index futures is stock index, which is fictitious and unique and more suitable for cash delivery. Domestic gold futures cannot be delivered in kind.
China's commodity futures trading all adopts physical delivery. Physical delivery methods include centralized delivery and rolling delivery. Although physical delivery accounts for a small proportion in the whole futures contract, it is physical delivery and this potential that make the changes of futures prices synchronized with the changes of related spot prices, and gradually approach with the approach of contract expiration date.
As far as its nature is concerned, physical delivery is a kind of spot trading behavior, but physical delivery in futures trading is the continuation of futures trading, which is at the junction of futures market and spot market and is the bridge and link between futures market and spot market. Therefore, the physical delivery in futures trading is the basis of the existence of the futures market and the fundamental premise for the two major economic functions of the futures market to play.