buying futures for physical delivery

[Directional]

Does anyone have any experience of buying futures for the purpose of taking physical delivery of the commodity?

Would be very interested in getting more info about the process, costs & delivery arrangements etc.

 

[grantx]

Arbitrageur,

Google "Exchange for physicals". May help. Postman may have problems delivering pork bellies.

Grant.

 

[anley]

What do you want to get deliver on, chances are with commodites your broker wonlt be able to offer this service unless it's a commodities broker.

 

[grantx]

Anley,

I think I'm correct here in that if a contract isn't closed out, delivery is automatic, regardless of whether the broker offers the facility - the underlying is delivered and then it's your problem. My remark above re pork bellies has an element of truth.

Grant.

 

[toxictrading]

Anley,

I think I'm correct here in that if a contract isn't closed out, delivery is automatic, regardless of whether the broker offers the facility - the underlying is delivered and then it's your problem. My remark above re pork bellies has an element of truth.

Grant.

correct, not such a massive problem if you expire long ( if you have a cash to pay for the physical) and have to take delivery, but if you expire short and have to make delivery and are incapable of doing this you will be in default and stopped from trading permanantly at that exchange, most exchanges will require you to provide them with proof of possesion of the physical once a contract goes into its notice period ( if it has a notice period) most brokers unless you have stated your intention is to go to delivery will automacally close your position (or should) close your position prior to expiry to save you from going to delivery.

what are you thinking of taking delivery on ?

 

[TWI]

For most products it is generally more expensive than just dealing in cash market and there is quite often a breadth of quality options for the seller and delivery locations where you can be tendered. The stroage costs in exchnge warehouses are also high.
What product were you thinking about? There are some contangos about which can make it worthwhile storing product, coffee is case in point but again better to book other storage and deal in cash market. It is the way a lot of people make money in Arabica.