<p>Different futures contracts have different delivery/final settlement machanisms. You need to look up each contract’s specifications.</p>

<p>The U.S. Treasury bond/note futures are an example of a complicated delivery mechanism. There are rules that set the basket of eligible bonds to delivery, as well as the factor relating the futures price to the price paid for the actual bond. That is, the price depends on what bond you deliver.</p>

<p>In the comments, you added more information. The key to understanding futures contracts is that holders get a daily profit/loss each day based on the change in the final settlement price. This means that even though the price for final delivery will likely be different than the price at which you entered the futures contract, you will get a gain/loss from the settlement process that matches the difference. The net result is that you effectively buy or sell at the fixed futures price you entered the position at; you just do not know the sequence of payments that occur as part of the settlement process.</p>

<p>For example, assume that you want to buy a commodity that is traded on a futures exchange. You enter into a long futures position at price of \$1000. If the futures price fell to 900 by the delivery date, you would pay \$900 for the delivery. However, you woukd have lost \$100 as a result of the daily settlement process on your long futures position. Your total cost is \$1000 - where you entered the position. The fact that there are up front gains/losses creates some complexity for fixed income, but that is a second order effect.</p>

<p>If you search around, you should be able to find materials explaining the difference between using futures to hedge versus a forward sale/purchase. That might help clear up your undertanding.</p>

CC BY-SA 4.0
2018-06-14T15:43:03.507Z
Do you know where specifically the delivery price is on the website? I have looked extensively on the 'specifications' tab of futures contracts and cannot find a delivery price (I thought it may be simply the price at which the future is purchase by the individual.
cyvarza
CC BY-SA 4.0
2018-06-15T16:18:13.360Z
The only prices posted are “daily settlement prices.” These are the prices used for futures trading. Delivery occurs at the contract expiry, and the contract specification details how the settlement price is translated into the price paid when the underlying instrument is delivered. You might get a better response on the quantitative finance stack exchange, but I think you need to be more specific about the contract you are looking at. Delivery has a very specific meaning in futures jargon, and deliver mechanisms are contract-specific.
Brian Romanchuk
CC BY-SA 4.0
2018-06-16T00:24:53.290Z
If the variable (daily settlement price) that fluctuates on a daily basis is used to calculate the future delivery price which is meant to be a fixed price in the future, doesn't this mean the delivery price also fluctuates on a daily basis? This is what I am trying to figure out; I was expecting to find a FIXED price in the future without fluctuation.

My only conclusion is that the future delivery price fluctuates less aggressively than the actual value of the commodity thus offering price security.
cyvarza
CC BY-SA 4.0
2018-06-16T22:28:51.093Z
@cyvarza When you enter into the contract, you get a daily profit/loss based on the change of the settle price. The result is that you have effectively locked in the price at which you entered into the position. The deviation of the delivery price from where you entered the futures position will be compensated by the gains/losses on the daily settlement that happened between those times. In other words, the effective delivery price is fixed.
Brian Romanchuk
CC BY-SA 4.0
2018-06-18T03:39:00.197Z
Let me make sure I understand: the price at which I purchase the contract is the future delivery price? So if I purchase an oil contract in July at 65$ and someone purchases the same contract at 66$ the next day, I am guaranteed oil in July at 65$ and the other is guaranteed the same specs but at 66$ instead?
cyvarza
CC BY-SA 4.0
2018-06-18T13:42:12.617Z
Look at the example I gave in the updated answer. The *delivery price* changes, but the changes in the delivery price are offset by the gains and losses from settlement. In your example, if the contract expires at \$66: you buy the delivered oil at \$66, but you will have gained \$1 from the daily change in settle price, so your cost is \$65 - where you entered the position.
Brian Romanchuk
CC BY-SA 4.0
2018-06-13T10:52:03.240Z
2018-06-16T22:47:59.470Z
2018-06-16T22:47:59.470Z
Brian Romanchuk
<p>Can someone tell me how to find the 'delivery price' on a futures exchange? This is the one detail I cannot find on a real futures exchange.</p>

CC BY-SA 4.0
2018-06-13T07:00:01.390Z
I'm voting to close this question as off-topic because it is not about economics.
Giskard
CC BY-SA 4.0
2018-06-14T15:41:29.200Z
Financial markets is definitely a branch of economics, and unfortunately there is not a section on stackexchange devoted to financial markets
cyvarza
CC BY-SA 4.0
2018-06-14T19:59:33.207Z
Economics also studies goods and commodities. Yet asking where the milk is in my local supermarket is off-topic.
Giskard
CC BY-SA 4.0
2018-06-15T16:13:54.647Z
There is a “finance” tag in the economics section. Perhaps this could be moved to quantitative finance.
Brian Romanchuk
CC BY-SA 4.0
2018-06-16T00:32:31.037Z
I viewed the other questions and tagged it in finance so this may be an amateur question but not off-topic, so if you know where the milk is please answer. This is 2/2 ppl want to remove question so please recommend an appropriate forum.
cyvarza
CC BY-SA 4.0
2018-06-17T05:43:44.570Z
@cyvarza there's [quant.se] and [money.se]
410 gone
CC BY-SA 4.0
2018-06-17T06:48:40.297Z
Are you looking for the actual spot price on the settlement date of historic futures contracts? Or are you possibly confusing futures with options? Because when you see a price quoted for, say, next-month futures, that **is** the settlement price: if you buy that future, that **is** the price you've paid for settlement, on the contract settlement date.
410 gone
CC BY-SA 4.0
2018-06-18T03:40:03.280Z
I may be confusing this with options
cyvarza
<finance>
Futures delivery price
cyvarza
# Futures delivery price

(Asked by: username_0 on 2018-06-13)

Can someone tell me how to find the 'delivery price' on a futures exchange? This is the one detail I cannot find on a real futures exchange.

**Tags:** finance
> **Comments:**
> **username_1**: I'm voting to close this question as off-topic because it is not about economics.  
> **username_0**: Financial markets is definitely a branch of economics, and unfortunately there is not a section on stackexchange devoted to financial markets  
> **username_1**: Economics also studies goods and commodities. Yet asking where the milk is in my local supermarket is off-topic.  
> **username_2**: There is a “finance” tag in the economics section. Perhaps this could be moved to quantitative finance.  
> **username_0**: I viewed the other questions and tagged it in finance so this may be an amateur question but not off-topic, so if you know where the milk is please answer. This is 2/2 ppl want to remove question so please recommend an appropriate forum.  
> **username_3**: @cyvarza there's [quant.se] and [money.se]  
> **username_3**: Are you looking for the actual spot price on the settlement date of historic futures contracts? Or are you possibly confusing futures with options? Because when you see a price quoted for, say, next-month futures, that **is** the settlement price: if you buy that future, that **is** the price you've paid for settlement, on the contract settlement date.  
> **username_0**: I may be confusing this with options  

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## 1 answers

### Answer by username_2 on 2018-06-13. Score: 1 | Accepted answer

Different futures contracts have different delivery/final settlement machanisms. You need to look up each contract’s specifications.

The U.S. Treasury bond/note futures are an example of a complicated delivery mechanism. There are rules that set the basket of eligible bonds to delivery, as well as the factor relating the futures price to the price paid for the actual bond. That is, the price depends on what bond you deliver.

In the comments, you added more information. The key to understanding futures contracts is that holders get a daily profit/loss each day based on the change in the final settlement price. This means that even though the price for final delivery will likely be different than the price at which you entered the futures contract, you will get a gain/loss from the settlement process that matches the difference. The net result is that you effectively buy or sell at the fixed futures price you entered the position at; you just do not know the sequence of payments that occur as part of the settlement process.

For example, assume that you want to buy a commodity that is traded on a futures exchange. You enter into a long futures position at price of \$1000. If the futures price fell to 900 by the delivery date, you would pay \$900 for the delivery. However, you woukd have lost \$100 as a result of the daily settlement process on your long futures position. Your total cost is \$1000 - where you entered the position. The fact that there are up front gains/losses creates some complexity for fixed income, but that is a second order effect.

If you search around, you should be able to find materials explaining the difference between using futures to hedge versus a forward sale/purchase. That might help clear up your undertanding.

> **Comments:**
> **username_0**: Do you know where specifically the delivery price is on the website? I have looked extensively on the 'specifications' tab of futures contracts and cannot find a delivery price (I thought it may be simply the price at which the future is purchase by the individual.  
> **username_2**: The only prices posted are “daily settlement prices.” These are the prices used for futures trading. Delivery occurs at the contract expiry, and the contract specification details how the settlement price is translated into the price paid when the underlying instrument is delivered. You might get a better response on the quantitative finance stack exchange, but I think you need to be more specific about the contract you are looking at. Delivery has a very specific meaning in futures jargon, and deliver mechanisms are contract-specific.  
> **username_0**: If the variable (daily settlement price) that fluctuates on a daily basis is used to calculate the future delivery price which is meant to be a fixed price in the future, doesn't this mean the delivery price also fluctuates on a daily basis? This is what I am trying to figure out; I was expecting to find a FIXED price in the future without fluctuation.  My only conclusion is that the future delivery price fluctuates less aggressively than the actual value of the commodity thus offering price security.  
> **username_2**: @cyvarza When you enter into the contract, you get a daily profit/loss based on the change of the settle price. The result is that you have effectively locked in the price at which you entered into the position. The deviation of the delivery price from where you entered the futures position will be compensated by the gains/losses on the daily settlement that happened between those times. In other words, the effective delivery price is fixed.  
> **username_0**: Let me make sure I understand: the price at which I purchase the contract is the future delivery price? So if I purchase an oil contract in July at 65$ and someone purchases the same contract at 66$ the next day, I am guaranteed oil in July at 65$ and the other is guaranteed the same specs but at 66$ instead?  
> **username_2**: Look at the example I gave in the updated answer. The *delivery price* changes, but the changes in the delivery price are offset by the gains and losses from settlement. In your example, if the contract expires at \$66: you buy the delivered oil at \$66, but you will have gained \$1 from the daily change in settle price, so your cost is \$65 - where you entered the position.  

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