What is 'Current Delivery'

Current delivery, sometimes referred to as "current delivery month" or "spot month," is a specific type of futures contract that requires the delivery of the underlying commodity in the current month – or, if in a subsequent month, the earliest possible one before other futures contracts of the same commodity with other delivery dates are due.

BREAKING DOWN 'Current Delivery'

Current delivery is one of several classes of futures contracts delivering the same underlying commodity, but defined by the month they're delivered. A contract described as "current delivery" is one with the nearest delivery.

More basically, a futures contract refers to a legal agreement to buy or sell a given commodity or other financial product.

The contract has to main components: a decided-upon amount, known as the "forward price," and at a specific time for fulfilment – the delivery date.

Futures contracts – sometimes simply called "futures" – are are standardized to facilitate trading on a futures exchange. Some contracts might require physical delivery of an asset; others are settled in cash.

The forward price is derived from the current spot price of the asset underlying the futures contract, which has no intrinsic value when first drawn up, but over time the contract might gain or lose value between inception and delivery date.

With regard to that date – the specified period during which the futures contract must be fulfilled – it can vary depending on the needs of the deal's participants. For some futures, the delivery period is the whole month, for others it's a specific date.

Examples of how current delivery contracts are structured

The website of the CME Group has specs for crude oil futures, offers a detailed example of how contracts can be structured and when contract deliveries might be due, depending on the month.

CME Group has "monthly contracts listed for the current year and the next eight calendar years and two additional consecutive contract months. Monthly contracts for a new calendar year and two additional consecutive contract months will be added following the termination of trading in the December contract of the current year."

More specifically, "trading in the current delivery month shall cease on the third business day prior to the twenty-fifth calendar day of the month preceding the delivery month," according to the derivatives marketplace. "If the twenty-fifth calendar day of the month is a non-business day, trading shall cease on the third business day prior to the last business day preceding the twenty-fifth calendar day. In the event that the official Exchange holiday schedule changes subsequent to the listing of a Crude Oil futures, the originally listed expiration date shall remain in effect. In the event that the originally listed expiration day is declared a holiday, expiration will move to the business day immediately prior."

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