Delivery means that when a futures contract expires, according to the rules and procedures of the delivery exchange, both parties to the futures transaction transfer the ownership of the subject matter indicated in the contract, or settle the cash difference at the settlement price to settle the expired open contract. As can be seen from the above description, the delivery of futures can be divided into physical delivery and cash delivery according to different delivery methods. The physical delivery of futures will be elaborated here.

What is physical delivery of futures?

Physical delivery of futures refers to the operation of transferring the ownership of the subject matter agreed in the futures contract and closing the open contract according to the rules and procedures of the relevant futures exchange when the futures contract expires. Generally speaking, there are two ways of physical delivery of futures: centralized delivery and rolling delivery.

1 centralized distribution

Centralized delivery, also known as one-time delivery, is a way to conduct one-time transactions on all expired futures contracts after the closing of the last trading day of the delivery month.

2 Rolling delivery

It refers to the delivery method from the first trading day to the penultimate trading day of the delivery month after the contract is delivered. This delivery method makes traders more flexible in the choice of trading time, which can effectively reduce storage time and delivery cost.

Expansion: among them, the domestic Shanghai Futures Exchange adopts the mode of centralized delivery; Zhengzhou Commodity Futures Exchange adopts a combination of rolling delivery and centralized delivery-you can apply for delivery after the contract enters delivery, and after the last trading day, you can make a one-time centralized delivery of the open contract; Dalian Commodity Futures Exchange adopts a combination of centralized delivery and rolling delivery for contracts such as soybean 1, soybean No.2, soybean meal, soybean oil and corn, and centralized delivery for contracts such as palm oil, linear low density polyethylene and polyvinyl chloride.