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.

  1. Basis Grade

    The minimum accepted standard that a deliverable commodity must ...
  2. Minimum Price Contract

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  3. Delivery Notice

    A notice written by the holder of the short position in a futures ...
  4. Approved Delivery Facility

    A facility authorized by an exchange to be used as a location ...
  5. Delivery Instrument

    A document given to the holder of a futures contact that may ...
  6. Certificated Stock

    The stock of a commodity that has been inspected by qualified ...
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  1. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  2. Can mutual funds invest in commodities?

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  3. How do futures contracts roll over?

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  4. Why do companies enter into futures contracts?

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  5. What does a futures contract cost?

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