CASH COMMODITY DELIVERY & FUTURES CASH DELIVERIES

What are deliveries?

Delivery generally refers to the changing of ownership or control of a physical commodity under specific terms and procedures, established by the exchange upon which the contract is traded, and which occurs on or before the Last Trading Day of a futures contract. The delivery payment is based on the contract's final settlement price.

Why take delivery?

Generally, professional traders leave the delivery situation to the commercials and producers. However, some professional traders take delivery intentionally. As an example, consider a metal cash and carry transaction: a trader takes delivery of December Gold, placing a forward hedge in June gold. In this transaction, the professional trader is looking to make a profit by carrying the gold forward from December to June.

What are our delivery policies?

Our margining policy with regard to purchasing deliveries is to require the purchaser to have 100% of the total funds, plus margin for the short hedge (if there is any) in his trading account three days before first notice day. Selling deliveries requires the seller to have the exact specified cash commodity on hand. Proving up usually means showing federal inspection certificates or approved warehouse receipts for the spot commodity. For all other traders who remain in the market beyond the above time limits, we reserve the right to liquidate their position without notice, and at our discretion. The liquidation of positions may or will occur up to one hour before the close on the business day prior to the first notice day (FND) or anytime thereafter.

To Avoid Delivery you must liquidate the deliverable position at least 1 day prior to First Notice Day.

To Take Delivery you must have in your account 3 days prior to first notice day:

1. the full contract value

2. all margins required for any further positions in the account, including any short hedges.

Note, in some New York markets, First Notice day follows Last Trading Day. In these instances, you must be out of the market one business day prior to Last Trading Day or Futures Expiration - Options Expirations.

We shall attempt to contact you by phone prior to taking any action. However, if no action is taken on your part, ClearTrade reserves the right to liquidate all deliverable positions, one day prior to first notice day. If you have any questions about this policy, please call Customer Service (800) 493-4444.