Physical Delivery and Warehouse Receipts
Chapters in this video
- 0:00 Delivery is paper, not trucks: the Trey and Fiona example
- 0:48 The formal definition of delivery and the delivery instrument
- 2:35 Warehouse receipt versus shipping certificate
- 4:07 Cash settlement: no commodity, no warehouse receipt
- 6:05 Series 3 exam traps and the ultimate gotcha
- 7:05 Rapid-fire recap
What this video covers
- What actually moves during physical delivery: a document of title, not the commodity itself
- The definition of delivery instrument and why it is the key phrase for every physical settlement question
- How a warehouse receipt evidences title to specific goods in an exchange-approved facility
- How a shipping certificate differs: a commitment to deliver on demand, not title to stored goods
- Why only exchange-approved facilities can issue valid delivery instruments, and the exam trap of unapproved locations
- The mechanics of cash settlement: final settlement price with no commodity movement and no warehouse receipt
- The ultimate exam trap: spotting a warehouse receipt paired with a cash-settled product like a stock-index future or SOFR contract
Read the full lesson, free
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