Offsetting Contracts, Settlements, and Delivery: Rapid Fire

What this video covers

• How offsetting works: equal and opposite trades in the same commodity, delivery month, and exchange, and what happens to open interest when one side is closing versus both sides
• Why the short controls delivery: timing, grade, location, and the exam trap of reversing this power dynamic
• First notice day (FND) as the hard deadline for longs who want out, and why speculative position limits tighten (not loosen) as the spot month approaches
• Novation: the clearinghouse becomes buyer to every seller and seller to every buyer, guaranteeing financial performance but never the physical commodity itself
• Transferable versus non-transferable delivery notices: which can be retendered and which locks the first assigned long into delivery
• What physical delivery actually moves: documents of title (warehouse receipts, shipping certificates), not the commodity itself, and how cash-settled contracts differ
• Exchange for physical (EFP): a permitted, reportable exception for privately negotiated swaps of futures for cash positions, not an illegal off-market trade