Delivery Option

DEFINITION of 'Delivery Option'

A feature added to some futures contracts permitting the short position to determine the combination of timing, location, quantity, and quality of the underlying commodity stated in the delivery notice.

BREAKING DOWN 'Delivery Option'

A delivery option provides a great deal of flexibility for the deliverer of the underlying commodity, but it poses a risk for the investors expecting delivery of the underlying.

RELATED TERMS
  1. Current Delivery

    A type of futures contract that requires the delivery of the ...
  2. Delivery Price

    The financial value of the conveyance of the underlying commodities ...
  3. Delivery Point

    In futures contracts, the delivery point is the place where the ...
  4. Approved Delivery Facility

    A facility authorized by an exchange to be used as a location ...
  5. In Sight

    A term describing deliverable grades of commodities underlying ...
  6. Delivery Notice

    A notice written by the holder of the short position in a futures ...
Related Articles
  1. ETFs & Mutual Funds

    Explaining Delivery Versus Payment

    Delivery versus payment is a common procedure for settling the exchange of securities.
  2. Personal Finance

    How Amazon's Restaurant Delivery Service Makes Money (AMZN)

    Amazon's delivery service acts as a loss leader to corner the market now before providing high margin revenue in the future.
  3. Markets

    Boeing Q2 Deliveries Show Weakness Lies Ahead

    Boeing's defense deliveries are down by almost 20% and commercial shipments remain flat, foreshadowing weakness ahead.
  4. Personal Finance

    The 3 Best Shipping Services to Use This Holiday Season (UPS, FDX)

    Look at the strengths, weaknesses and comparative costs of the three best shipping companies: the U.S. Postal Service, UPS and FedEx.
  5. Markets

    Crude Oil Prices: Comparing Future Price Vs. Current Market Price

    Discover the differences between oil futures market prices and oil spot market prices and what leads to the differences between the two.
  6. Markets

    Understanding the Commodity Market

    There are currently 50 physical and virtual commodity markets worldwide where almost 100 primary commodities trade through the exchange of ownership rights.
  7. Insights

    Introducing the New Starship Technologies Delivery Robot

    A self-driving delivery robot designed by the co-founders of Skype is revolutionizing the way goods are shipped and delivered by eliminating inefficiency.
  8. Managing Wealth

    How To Invest In Commodities

    Find out which futures, options or funds will be your perfect commodity portfolio fit.
  9. Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  10. Personal Finance

    Google Express vs. Amazon Prime Now (GOOG, AMZN)

    Google and Amazon are battling for workers and customer dollars as the retail delivery wars heat up.
RELATED FAQS
  1. 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 >>
  2. How do I learn technical skills for trading commodities?

    Learn what resources are available to learn about trading commodities, and understand some of the differences between stocks ... Read Answer >>
  3. What does it mean to take delivery of a derivative contract?

    Find out more about derivative contracts and what it means when the holders of derivative contracts take delivery of the ... 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 are commodity spot prices different than futures prices?

    Find out more about commodity spot and futures prices, how to calculate a commodity's futures price, and the differences ... Read Answer >>
  6. How do commodity spot prices indicate future price movements?

    Find out more about commodity spot and futures prices, how to calculate commodity futures prices and how spot prices indicate ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center