Most positions in the futures market are closed or rolled over before the start of the physical delivery cycle. Only a small percentage are held until physical delivery occurs. As the delivery month of a futures contract approaches, the spot price and the futures price will converge, often becoming nearly equal.

Therefore, understanding the delivery process and the important timelines in commodity trading is crucial as it impacts the futures contract prices.

• First Trade Date (FTD): The date on which the contract begins trading.

• Last Trade Date (LTD): The final date when the contract is traded. This is the last opportunity for sellers to close their positions if they do not wish to make delivery.

• Settlement Date: The date on which the final settlement price of the contract is determined.

• First Position Date: The first day the clearinghouse accepts the intent and takes on obligations for contracts proceeding to delivery.

• Last Position Date: The last day the clearinghouse accepts delivery intentions and obligations for contracts proceeding to delivery.

• First Holding Date: The first day the clearinghouse manages the holding dates related to the positions of contracts proceeding to delivery (if applicable).

• Last Holding Date: The last day the clearinghouse requires holding dates related to positions of contracts proceeding to delivery (if applicable).

• First Notice Date: The first day on which buyers and sellers are notified of the obligation to make delivery. This is also the first day sellers can begin delivering the commodity. Speculators holding a long position beyond this date may receive a notice of physical delivery. If they do not wish to take delivery, they must immediately close out their position, which may incur penalties.

• Last Notice Date: The last day on which buyers and sellers are notified of the obligation to make delivery.

• First Delivery Date: The first day on which the actual delivery of the commodity is completed between buyers and sellers.

• Last Delivery Date: The final day for the completion of delivery obligations between buyers and sellers.

  
  

Source: Compiled information.