Query on Commodity trading w.r.t physical delivery

[Shre]

I want to trade metal(ZINC,COPPER,LEAD) and energy comm.(CRUDEOIL, NaturalGas).

What should i do so that i can avoid the physical delivery of the above commodities?

Please answer with both intraday and positional trading perspective.

[Srinivas]

Metals and energy commodities are cash settled. There is no physical delivery here.

[Shre]

Ok.

1. If i am having a position by NRML order 4 days before expiry, and i don’t squareoff that contract, then what happens at the expiry day?
   Just the cash settlement happens(as in NIFTY FUT trading)?

2. So, in metals and energy commodities, i can enter a trade any day/time before the expiry, i can hold positions for as many days as i want till expiry day, with no obligations of physical delivery, RIGHT?

3. What all commodities that i need to be careful regarding the physical delivery (other than GOLD and SILVER family)?

[Srinivas]

@Shre

If i am having a position by NRML order 4 days before expiry, and i don’t squareoff that contract, then what happens at the expiry day?

Just the cash settlement happens(as in NIFTY FUT trading)?

1. Yes, settlement by cash only, at settlement price on expiry day.

@Shre

So, in metals and energy commodities, i can enter a trade any day/time before the expiry, i can hold positions for as many days as i want till expiry day, with no obligations of physical delivery, RIGHT?

2. You’re right, no obligations of physical delivery.

@Shre

What all commodities that i need to be careful regarding the physical delivery (other than GOLD and SILVER family)?

3. All commodity futures are cash settled.

[Shre]

@Srinivas

All commodity futures are cash settled.

But Gold and silver we can get physical delivery by specifying our intention 4 days before the expiry.(ZERODHA doesn’t allow it)
(But in general we can do so right)?

In that way, what commodities have physical delivery?

[Srinivas]

Check out the posts below for more info on commodity delivery.

Commodity delivery related queries

The main delivery centre is for Gold, Gold Mini and Gold Guinea is Ahmedabad. The Gold petal contract is deliverable at Mumbai. The Additional delivery centres for Gold, Gold Mini are Mumbai and Delhi. ( Circular No MCX/198/2005). The Gold which is accepted for delivery is serially numbered. Duty paid gold bars supplied by LBMA approved suppliers are approved by MCX to be submitted along with suppliers certificate. The expiry date of the contract is the 5th. The seller needs to deposit the me…

Questions related to energy commodities

There is no designated delivery center for crude and natural gas. What is the provision to handle physical settlement in these commodities? What is the logic behind contract launch and expiry especially for crude oil and natural gas?

[Shre]

Yes i have seen them, but my doubts are not specifically cleared by them.

Please clarify the below things.

@Srinivas

All commodity futures are cash settled.

But Gold and silver we can get physical delivery by specifying our intention 4 days before the expiry.(ZERODHA doesn’t allow it)
(But mcx exchange allows to do so right)?

In that way, what commodities have physical delivery?