In financial markets, the term "delivery" refers to the act of delivering goods, currency, securities, cash, or another instrument that is the subject matter of a contract. Let's find out with Giaiphapdonggoi.net what is Delivery!
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1. What is Delivery?
What is Delivery?
Delivery is the act of delivering an underlying asset when a derivative contract has reached its maturity date. It is commonly used in relation to options and futures contracts.
Most traders in the derivatives market do not intend to deliver the underlying asset, but instead, pay in cash.
In some cases, the buyer of the contract may receive physical delivery for the underlying commodity, such as barrels of oil in the case of crude oil futures. Usually, however, a financially settled contract means cash is transferred instead of the underlying physical commodity.
Delivery usually refers to larger items, such as large appliances and furniture, that need installation or a delivery man picks it up in your home - items to be delivered are often too large to ship. . Delivery is also the term used to refer to the date the package will arrive at the customer's doorstep. However, this date is often a general estimate as it is not controllable by the supplier and may be delayed by unforeseen circumstances.
Delivery also refers to the date the package will reach the customer. Delivery charges may vary depending on the required distance from the warehouse to the customer.
2. How Delivery Works
How Delivery Works
When two parties enter into a contract together, they must agree on a number of key terms, two of which are the contract's price and the contract's expiration date. Upon maturity, the seller is required to deliver the underlying commodity to the buyer, or otherwise pay the contract at a profit or loss.
Depending on the type of commodity in question, there can be different ways in which merchants typically navigate deliveries. In the forex market, for example, holders of currency futures contracts typically settle their contracts by delivering the base currency. On the other hand, in the case of a stock option contract, it is common for the holder to settle the contract in cash rather than delivering the specific shares that are the underlying asset for the option.
The choice of delivery treatment also depends on the type of merchant in question. Certain companies, such as refineries that depend on oil for production, may take physical delivery when their contracts expire. These buyers already have the infrastructure in place for physical delivery, such as trucks and containers in the case of crude oil. On the other hand, speculative buyers will not deliver the actual goods. Instead, they will simply hope to profit from an increase in the price of the underlying commodity and will seek to settle the contract in cash by selling their contract to a third party before it can be settled. expired.
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3. What is the difference between shipping vs delivery?
What is the difference between shipping vs delivery?
Overall, there are two key differences between shipping and delivery. First is the size: smaller items are shipped while larger items are delivered. The second difference is the date of each match. Shipping date usually refers to when an item leaves the warehouse while delivery date specifies when the item will reach the customer.
In the simplest terms possible: shipping is the date the product will leave the supplier's warehouse while delivery is the date the package will arrive at the customer's doorstep. Terms are often confusing to customers; However, you can avoid this by providing two dates: the shipping date and the delivery date.
This way, the customer will have a clearer understanding of what each term means and how long it will take for their product to reach the customer. Companies can make this process simpler by emailing shipping and delivery tracking information to customers. The shipping date will let the customer know the product has left the warehouse, and the delivery date will tell them clearly when they should place an order. Shipping was originally called “outbound” and delivery is still sometimes referred to as “delivery”. These previously used terms help clients better understand what they mean and the process involved.
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