Investopedia

Continue to Site »

Delivery Point

Filed Under » , , ,
Dictionary Says

Definition of 'Delivery Point'

In futures contracts, the delivery point is the place where the commodity will be delivered; the chosen location will have an effect on the net delivery price/cost. The price of commodities differs by location due to the costs of transporting them from their source to the delivery point. Thus, in order to specify a single price of a commodity for contract purposes, the delivery point is an essential detail.
Investopedia Says

Investopedia explains 'Delivery Point'

The delivery point is most often set at major transportation hubs for the commodity. These places are popular as a matter of convention. For example, Cushing, Oklahoma is a popular delivery point for oil contracts. Meanwhile, the Henry Hub in Erath, Louisiana is a popular delivery point for natural gas contracts. The change in prices due to the delivery point is readily observable in gasoline prices. If you go on a road trip between cities, you will most often notice gradual changes in the average price of gasoline. Prices are lowest around major oil refining centers. Where gasoline must be delivered over a very long distance, prices will be considerably higher.

Articles Of Interest

  1.

    Top 4 Mistakes That Cause Futures Traders To Fail

    Learn to keep your losses to a minimum and consistently produce positive results.

  2. Master Futures Trading With Trend-Following Indicators

    The futures market is a lot less scary when these indicators are used to establish current trends.

  3. Sizing A Futures Trade Using Average True Range

    Futures trading is risky business, so it's crucial that traders' positions match the level of risk they are willing to bear.

  4. Tips For Getting Into Futures Trading

    The futures markets can seem daunting, but these explanations and strategies will help you trade like a pro.

  5. An Overview Of Commodities Trading

    Foresight and careful observation are the keys to trading this market.

  6. Making It Big On Wall Street

    Read about some of the most glamorous Wall Street jobs and what it takes to land one.

  7. Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.

  8. Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.

  9. Build A Baby Berkshire

    Get a piece of Warren Buffett's profit by using Form 13F to coattail his picks.

  10. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center