Actuals refers to the homogeneous commodities that are the basis for a futures trade. Actuals can be any commodity, but some commonly traded ones include crude oil, heating oil, RBOB gasoline, natural gas, sugar no. 11, gold, copper, silver, platinum, wheat, corn and soy. The actuals making up the most liquid contracts see seasonal shifts base on their real world production schedules, particularly with agricultural products. Actuals are often referred to as the cash commodity, the underlying, the reference commodity and sometimes even the underlying reference commodity.


Actuals are simply the goods that are being traded in the contracts. In the futures market, two parties enter into an exchange-traded contract in which one party agrees to deliver a set quantity and quality of the underlying commodity while the other party agrees to purchase the commodity. The physical delivery of the actuals can be avoided through cash settlement and the parties in the contract can sell their positions before delivery.

Actuals and the Buyer’s Intent

The question of whether the actuals of a contract matter depends entirely on the buyer’s intent. Manufacturers, refineries, processors and other users of the raw materials and commodities traded on the futures market can enter contracts with the intention of taking delivery of the actuals to ensure they have sufficient stocks on hand to keep operating. This means they want the barrels of crude, the bushels of wheat and the pounds of meat for the purpose of refining, feeding, processing and so on. These buyers who are also end users of the actuals may use the cash settlement version of the contract purely to hedge contracts they have in the non-exchange traded physical market.

Of course, there are also speculators, investors and traders in the futures market who have no intention of taking delivery and are less interested in the actuals beyond the historical, seasonal and current pricing trends they are hoping to profit off of through the trade. Despite an almost traditional distrust of these non-end users trading commodities purely for profit, the contracts they trade are no different in their market function from the ones traded by entities with the intention to use the actuals involved. The delivery mechanism in the futures market makes certain all the contracts converge on a fair market price and that pricing risks are parceled out to those who want it, regardless of buyer intent.

Actuals in the Physical Market

Actuals are, of course, traded in the physical market as well as the futures market. In the physical market, two parties enter into a private agreement to exchange the commodity for cash or another commodity, and delivery almost always occurs. In fact, any failure to deliver is usually a breach of contract that opens up legal liability. The actuals trade in the physical market is essentially a signed purchasing contract where the product amount is specified to ensure both parties are clear. A contract for actuals in the physical market is unlikely to change hands and it often contains more conditions as to the grade and quality of the actuals compared to a futures market contract.