It was been fascinating to watch the change in the price of the WTI oil futures contract over the past two days. Without boring you with details, I have some investment experience but one is never too old to learn something new. I have never traded a futures contract...
I was under the impression that delivery was mostly a textbook concept and did not apply much to the real world. I thought trading futures in a way was similar to trading options in that one who initiates an opening purchase would close it out by implementing a closing sale. Investors in options rarely exercise long contracts, partly because you would be giving up the time value part of the contract. Consistent with the lack of exercising in options, I assumed that there would a lack of delivery in futures.
Based on the past couple of days, I have learned that certain institutional entities in the industry actually do deliver or take delivery of the actual commodity. I was wondering if anyone here knows the percentage of contacts that come a conclusion via delivery? Does every contract finish with a delivery or do none of the contracts finish with delivery or is the answer somewhere in between all or none?
I don't think those numbers are publicly available. I would guess that it's between 1% and 5%, closer to 1%--a very small percent of contracts are settled physically. Experienced traders please correct if I'm wrong.
Et aspernatur voluptate eveniet. Et molestiae autem quaerat.
Quia itaque et repudiandae quae non tenetur. Quis culpa laborum officia impedit numquam neque. Repellat repudiandae consequatur enim. Aut animi corporis rerum atque. Sequi quidem nesciunt cumque ut dolore.
Reiciendis nulla et earum. Voluptatem magni ea vitae repellat. Qui impedit repellendus voluptas ut. Voluptates nemo voluptates quo consequatur. Vitae ea consequatur et porro nihil. Excepturi rerum ratione est omnis fugiat dolorem.
Harum saepe nesciunt dolores est est totam qui. In quo soluta nemo sit nesciunt. Quis ut id neque ut qui ullam aut. Soluta aliquam qui iste aut cum doloribus. Recusandae exercitationem impedit sed aliquid repudiandae ea non inventore. Rerum quis accusantium illum harum reprehenderit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...