Physical Delivery

Term in an options or futures contract which requires the actual underlying asset to be delivered upon the specified delivery date, rather than being traded out with offsetting contracts.

Most derivatives are not actually exercised, but are traded out before their delivery date. However, physical delivery still occurs with some trades: it is most common with commodities, but can also occur with other financial instruments.


Investment dictionary. . 2012.

Look at other dictionaries:

  • physical delivery — settlement of a contract by the delivery or receipt of a financial instrument ( instruments) or commodity. Contrast with cash settlement, where no delivery of an underlying physical asset takes place. Dresdner Kleinwort Wasserstein financial… …   Financial and business terms

  • physical delivery — Manual delivery; a delivery from hand to hand. 23 Am J2d Deeds § 91 …   Ballentine's law dictionary

  • physical delivery — The settlement of an option or futures contract by the delivery of the underlying rather than an equivalent cash settlement …   Big dictionary of business and management

  • delivery — de·liv·ery n pl er·ies: an act that shows a transferor s intent to make a transfer of property (as a gift); esp: the transfer of possession or exclusive control of property to another actual delivery: a delivery (as by hand or shipment) of actual …   Law dictionary

  • physical — phys‧i‧cal [ˈfɪzɪkl] adjective 1. real and actual: • the physical counting of goods in stock 2. ACCOUNTING related to assets that can be seen and touched, such as machines and buildings; = TANGIBLE: • They had a physical plant valued at… …   Financial and business terms

  • physical — I adjective actual, bodily, carnal, concrete, corporal, corporeal, corporeous, earthly, embodied, external, flesh and blood, fleshly, human, incarnate, material, materiate, mundane, natural, nonspiritual, organic, palpable, real, sensible,… …   Law dictionary

  • delivery — The transfer of the cash commodity from the seller of a futures contract to the buyer of a futures contract. Each futures exchange has specific procedures for delivery of a cash commodity. Some futures contracts, such as stock index contracts,… …   Financial and business terms

  • delivery — The act by which the res or substance thereof is placed within the actual or constructive possession or control of another. Poor v. American Locomotive Co., C.C.A.I11., 67 F.2d 626, 630. What constitutes delivery depends largely on the intent of… …   Black's law dictionary

  • delivery — The act by which the res or substance thereof is placed within the actual or constructive possession or control of another. Poor v. American Locomotive Co., C.C.A.I11., 67 F.2d 626, 630. What constitutes delivery depends largely on the intent of… …   Black's law dictionary

  • Delivery Month — A key characteristic of a futures contract that designates when the contract expires and when the underlying asset must be delivered. The exchange on the futures contract is traded will also establish a delivery location and a date within the… …   Investment dictionary

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