Physical delivery refers to the behavior of both parties to the futures contract to close the positions of the expired open contracts by transferring the ownership of the subject matter of the futures contract in accordance with the standards and procedures formulated by the exchange. Commodity futures trading generally adopts the way of physical delivery. After entering the delivery period, the seller submits the standard warehouse receipt, and the buyer submits the full amount to the exchange for delivery. This is what physical delivery means.

Advantages of physical delivery

1, which can better realize the spot market investment strategy, such as setting the specific price of buying and selling stocks;

2. It can greatly reduce the possibility that the settlement price is manipulated artificially;

3. It can meet the demand of physical delivery in the spot market;

4. It can ensure that bulls and bears match the supply and demand of the relevant spot market and reasonably reflect the fundamentals of the spot.

Compared with physical delivery, the biggest advantage of cash delivery is convenience, which can reduce the process of option trading and reduce the risk of operation. Secondly, any market participant is eligible to participate in cash settlement. This paper mainly writes the meaning of physical delivery and related knowledge points, and the content is for reference only.