For the commodities where the settlement logic is - Staggered Physical Delivery, how will the traders get to know if the exchange has marked their open contracts as delivery during the delivery intention period?
Will there be an intimation through SMS/mail on the same day or will it be disclosed to the contract holder only on the expiry day?
And also, is ‘Delivery Intention Period’ and ‘Staggered Delivery Tender Period’ same thing?
If you hold position which is physical settlement contract, From tender period start date exchange attracts higher margin(delivery and tender margin).
If it is staggered delivery contract, from tender period date exchange start marking the physically delivery for open buy contract randomly as per the seller consent. If a position is marked for physical settlement client will get intimation from the broker(exchange will send information to broker) with the complete procedure to honor physical settlement.
Staggered delivery period will/may be 10 day prior to expiry.
During this 10 days any days seller can give delivery intention. Once seller gives intention with proper exchange prescribed format to broker, broker will inform to exchange and exchange will mark physical delivery to random buyer in exchange through other broker with that quantity. This will happen in same day on which seller has given the delivery intention.
Thanks