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Market Intelligence › Basic Terminologies
Delivery contracts, warehouse receipts, and tender period
Published by The Retail Trader · AUG 01, 2026 · Derivatives & Commodities
Some commodity contracts require delivery of the actual commodity upon expiry. This is almost never a goal for the retail participant, but it is important to know its rules.
There is a tender period before expiry in which delivery intention is given. After that the delivery exchange takes place through approved warehouses.
The proof of goods is a warehouse receipt, which can be kept in demat form. Quality assaying and storage charges are also associated with it.
These things are practical:
• Delivery should not be done until the position is closed before the tender period.
• Margin increases near expiry, like in stock derivatives.
• Some contracts are cash settled — this is written in the contract specification.
• The cost of storage and insurance on delivery is yours.
It is enough to do one line check before taking every commodity contract – whether it is cash settled or compulsory delivery. This one line decides the exit plan of the entire trade, and getting it wrong can be the most costly surprise.
This article is for educational purposes only. It is not a buy or sell recommendation, a claim of guaranteed returns, or advisory guidance. Exchanges, SEBI and RBI change rules, rates and procedures from time to time, so verify every figure with your broker or an official source.