Physical delivery refers to the behavior of the buyers and sellers of futures contracts to close the positions of the expired open contracts by transferring the ownership of the subject matter of futures contracts in accordance with the rules and procedures formulated by the exchange. Commodity futures trading generally adopts the way of physical delivery.

Cash delivery means that when futures contracts are closed at the end of the period, the profit and loss of the open contracts are calculated at the settlement price, and the delivery difference is paid in cash to finally settle the futures contracts. This delivery method is mainly used for financial futures and other futures contracts that cannot be delivered in kind, such as stock index futures contracts.