Physical delivery

Physical delivery and liquidation rules for futures and futures options

In the case of futures contracts, which are settled through the physical delivery of the underlying commodity, customers may not issue an order for the delivery of the underlying commodity or receive any such order. Certain foreign exchange futures are excluded from this rule (see the following table).

In order to prevent the delivery of an expiring futures contract, customers have to exchange (roll or prolong) their position for one with a later expiry date or close their positions before the close-out deadline (the first day on which a physical delivery order can be placed). Generally, the close-out deadline for long positions is set as the end of the fourth working day before the first notice day specified by the stock exchange (the first day on which the holder of a short position can notify the delivery of the goods with the stock exchange). For traders with short positions, the time set as the end of the fourth working day before the last trading day specified by the stock exchange is viewed as the close-out deadline. In the case of certain contracts, which you can see in the table on this page, the time frame prior to the period of the close-out deadline is different.

It is the responsibility of the customer to obtain all the necessary information about the close-out deadline and act accordingly. If a customer does not part with a position with a physical delivery by the close-out deadline, the broker can or has to liquidate this position in the expiring contract without sending any other message to the customer.
PLEASE NOTE: Any working orders are not affected by this kind of liquidation. This may create a situation where working orders may possibly continue to exist until the closure of the futures position liquidated by the broker and possibly could be traded. This then creates a situation that a working order originally given to close a position is reversed and a position is opened against the customer’s will.
For their part, customers must ensure that any open working orders of closed positions are adapted accordingly to the actual portfolio situation.

Summary of the approach in the case of the physical delivery of futures

ContractDelivery allowedMost extreme close-out deadline
ZB, ZN, ZF (ECBOT) No 2 hours before the end of the open outcry trade on the trading day before the first notice day (longs) or the last trading day (shorts)
ZT (ECBOT) futures, Japanese government bond futures (JGB) No From the end of the second-to-last working day before the first position day (longs) or the last trading day (shorts)
EUREXUS futures No From the end of the third-to-last working day before the first position day (longs) or the last trading day (shorts)
EUREXUS 2-year jumbo bonds (FTN2) or 3-year bonds (FTN3) futures No From the third-to-last working day before the first position day (longs) or the last trading day (shorts)
IPE contracts (GAS, NGS) No From the end of the third-to-last working day before the first position day (longs) or the last trading day (shorts)
GLOBEX LIVE CATTLE (LE) No From the end of the third-to-last working day before the first intent day (longs) or the last trading day (shorts)
GLOBEX NOK, SEK, PLZ, CZK, ILS, KRW and HUF, and corresponding euro rates No From the end of the fifth-to-last working day before the last trading day for longs and shorts
GBL, GBM, GBS (Eurex), CONF (SOFFEX) No 2 hours before the end of trading on the last trading day
GLOBEX currency futures (EUR, GBP, CHF, AUD, CAD, JPY, HKD) Yes* Information not available*
GLOBEX Ethanol futures (ET) No From the end of the fifth-to-last working day before the first position day (longs) or the last trading day (shorts)
All other contracts No From the end of the third-to-last working day before the first intent day (longs) or the last trading day (shorts)

* As you can only keep limited amounts of foreign currency in cash and IRA accounts, the “All other contracts” line applies to cash and IRA accounts for these kinds of foreign currency products.

Summary of the approach in the case of the physical delivery of futures options

ContractDelivery allowedMost extreme close-out deadline
OZB, OZN, OZF, OZT (ECBOT) No 4 hours before the end of the open outcry of trading on the trading day before the first notice day (longs) or the last trading day (shorts)
All other contracts No From the end of the third-to-last working day before the first intent day (longs) or the last trading day (shorts)

Please note

The name of the expiration month for these products is known as “the month which follows the actual expiration of this product” or “the delivery date for these products” as the industrial standard in conjunction with certain commodities and options. The ATS trading software could also contain incorrect expiration or notice date information. Most US government and German bonds futures options are examples of atypical dating.

The normal commission is calculated for expiring or prolonging contracts.

 

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