Delivery Price

AAA

DEFINITION of 'Delivery Price'

The financial value of the conveyance of the underlying commodities when a futures or forward contract expires. The delivery price is the price at which one party agrees to deliver the underlying commodity and at which the counterparty agrees to accept delivery. Delivery price can also refer to a stock's selling price in options contracts. Delivery prices are set by clearinghouses.

INVESTOPEDIA EXPLAINS 'Delivery Price'

In forward contracts, the forward price and the delivery price are identical when the contract begins, but as time passes, the forward price will fluctuate and the delivery price will remain constant. Also, underlying assets typically are not actually delivered, but rather closed out with offsetting contracts. Another possibility is that a delivery instrument representing the underlying asset, such as a warehouse receipt, will be transferred instead of the actual commodity. If the commodity is physically delivered, the cost of delivery will affect the contract's delivery price.

RELATED TERMS
  1. Minimum Price Contract

    A forward contract with a provision that guarantees a minimum ...
  2. Delivery Instrument

    A document given to the holder of a futures contact that may ...
  3. Delivery Notice

    A notice written by the holder of the short position in a futures ...
  4. Spot Price

    The current price at which a particular security can be bought ...
  5. Carrying Charge

    Cost associated with storing a physical commodity or holding ...
  6. Cash Commodity

    In futures trading, the cash commodity is delivered for payments. ...
Related Articles
  1. Getting Started In Foreign Exchange ...
    Forex Education

    Getting Started In Foreign Exchange ...

  2. Interpreting Volume For The Futures ...
    Options & Futures

    Interpreting Volume For The Futures ...

  3. Options On Futures: A World Of Potential ...
    Options & Futures

    Options On Futures: A World Of Potential ...

  4. Futures Fundamentals
    Insurance

    Futures Fundamentals

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center