Delivery Notice

DEFINITION of 'Delivery Notice'

A notice written by the holder of the short position in a futures contract informing the clearing house of the intent and details of delivering a commodity for settlement.

BREAKING DOWN 'Delivery Notice'

The delivery notice is important for both the short and long positions of a futures contract. As some contracts allow a range for the basis grade of underlying commodities, the grade in the delivery notice must be properly identified. This notice provides for a clear written contract describing the specifics for such a delivery.

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RELATED FAQS
  1. What is the difference between forward and futures contracts?

    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell ... Read Answer >>
  2. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
  3. What's the difference between cash-on-delivery differ and delivery against payment?

    Find out more about cash on delivery and delivery versus payment transactions and the difference between these two types ... Read Answer >>
  4. Why do futures' prices converge upon spot prices during the delivery month?

    It's a fairly safe bet that as the delivery month of a futures contract approaches, the future's price will generally inch ... Read Answer >>
  5. How do the investment risks differ between options and futures?

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  6. What's the best way to play backwardation in the futures market?

    Backwardation is a market condition in which a futures contract far from its delivery date is trading at a lower price than ... Read Answer >>
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