Physical delivery
Physical delivery is the settlement of a futures contract by transferring the underlying itself, such as barrels of crude oil, bushels of grain, Treasury securities or currency, from the short to the long against payment. It applies only to contracts whose specification calls for delivery; cash-settled contracts such as ES and NQ never deliver anything.
Senzoukria · Glossary · Updated September 2026
Definition
The CFTC glossary defines delivery as the tender and receipt of the actual commodity, the cash value of the commodity, or of a delivery instrument covering it, used to settle a futures contract. Physical delivery is the first case: the contract ends with goods or securities changing hands at the terms, grade and location the specification sets.
How it unfolds
- The delivery period opens on first notice day for many contracts.
- Shorts who intend to deliver give notice through their clearing firm.
- The clearing house assigns those notices to long positions.
- The long pays the invoice amount and receives the commodity, securities or currency, often in a form, such as a warehouse receipt, rather than a truckload.
Which contracts deliver
WTI crude oil, many metals, grains, Treasury futures and CME currency futures are delivered contracts; E-mini equity index futures, lean hogs and feeder cattle are cash-settled. The contract specification's settlement method is the only reliable answer for a given product.
Scale makes the point: one CL contract carries a multiplier of 1,000, so a single long held into delivery corresponds to 1,000 barrels of crude to be taken at the contract's delivery point.
Why it matters to an order flow trader
Delivery is the reason volume in delivered contracts moves to the next month before the last trading day. The expiring contract's book thins as speculative traders leave ahead of the notice period, and a chart kept on it shows an increasingly unrepresentative market.
In Senzoukria
The catalogue's expiry rules for Treasuries and COMEX metals are set to roll before the delivery period, earlier than the official last trading day, so the default contract is never one that has become deliverable. The application does not handle delivery notices or delivery accounting; that remains with the broker.
Common mistakes
- Holding a delivered long into the notice period on a retail account.
- Assuming all commodities deliver: some, such as lean hogs, are cash-settled.
- Reading the thin book of an expiring delivered contract as a genuine liquidity signal.
Related
In the same section
Sources
- CFTC glossary (2026-09-25)
This page in other languages
Frequently asked questions
- Can a retail trader end up with a delivery of crude oil?
- Brokers generally prevent it by requiring positions in delivered contracts to be closed before the delivery period and by liquidating those that are not. The contractual obligation nonetheless exists, which is why the roll dates of delivered contracts matter.
- Are currency futures physically delivered?
- CME's major currency futures settle by delivery of the currencies. Their specifications state the settlement method, and that is the document to check for any particular contract.