Physical Delivery

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Physical Delivery

In options and futures, the act of a seller giving the actual underlying asset to a buyer. Physical delivery does not occur for most option and futures transactions; most traders offset their positions by entering an equal but opposite position. However, in order to hedge certain risks, physical delivery does occur on some contracts, notably those involving commodities. See also: Actuals.
References in periodicals archive ?
The purchase consideration also includes an earn-out payable by the JBBR partnership to CenterPoint based upon petroleum product throughput volumes at the Joliet Terminal (which includes minimum volumes paid under customer contracts irrespective of physical deliveries of product thereunder).
The four-year bull market in commodities is the product of a marked increase in demand for physical deliveries, particularly from China and the developing economics of Asia, and of the limited growth in new mining and refining capacity.
Ms Mercy Liu senior manager of CME Group stated, Iron ore futures on Dalian Commodity Exchange has significant meanings to iron ore derivatives and fills the gap in physical deliveries. Contract on DCE and our contract are complementary and increases the changes to arbitrage across markets.