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Yes, this almost happened to me once when I was trading futures. My broker called me several times throughout the day and I couldn't take the call. When I final

Yes, this almost happened to me once when I was trading futures. My broker called me several times throughout the day and I couldn't take the call. When I finally did, he told me to roll my contract forward that day otherwise I would have to take delivery of 1000 bushels of corn.

caseysoftware 7y ago
I'd love to hear from someone that got stuck with the 1000 bushels of corn (or similar). What do you do? How in the world do you manage that?
- draw_down 7y ago
  I remember this happened once, to someone who bought cocoa on the commodities market.
- lozaning 7y ago
  There's a story online thats floated around for a while about a guy that ended up with like 10 tonnes of coal this way. Was delivered via barge somewhere if I recall correctly. Edit: finally found it: https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery
- whatok 7y ago
  John C. Hull - Options, Futures, and Other Derivatives has details on an accidental cattle futures physical settlement. https://www.passeidireto.com/arquivo/73586616/john-c-hull-options-futures-and-other-derivatives-pearson-2017/19 https://www.passeidireto.com/arquivo/73586616/john-c-hull-op...
- koheripbal 7y ago
  There are services you can call to help you out of this predicament. Obviously they charge a huge margin.
- bluGill 7y ago
  Worse it isn't 1000 bushes at your home it is at some transfer point several states away. If you are lucky it is an elevator that sends you a bill for storage and can unload them. If you are unlucky you need to get a truck (with a driver) there on short notice to get it out of there.
  - lonelappde 7y ago
    What if you just don't? You probably just get a larger bill.
    - pas 7y ago
      Sure, but that can become a very big bill fast. Basically they can charge you (almost) whatever they want.
- cecilpl2 7y ago
  https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery
- Qworg 7y ago
  There's a great Planet Money story on the Onion King. https://www.npr.org/sections/money/2018/09/19/649273647/episode-657-the-tale-of-the-onion-king https://www.npr.org/sections/money/2018/09/19/649273647/epis...
  - selimthegrim 7y ago
    You know, why didn’t Louis Sachar write a YA book about this?
  - mrnobody_67 7y ago
    That was an amazing episode
- gezh 7y ago
  If I remember correctly, in contrast to WTI, you will get assigned a shipping/warehouse certificate for wheat/corn in a designated elevator somewhere. You'll have to pay the warehouse a daily carry cost but don't actually have to take it out of that warehouse (you can if you want to).
  - hkmurakami 7y ago
    That reminds me of the GS Aluminum storage warehouse story.
ISL 7y ago
My grandfather in Colorado did the opposite once in the 1970s. He needed some cattle, so he bought a small quantity of cattle futures of some form (I was too young when I heard the story to remember the details) from a broker/commodity trader in Chicago. When the contract approached the settlement date, the broker called to ask him to sell. Trouble was, my grandfather just wanted cows, not cash. The broker was frustrated to no end. Long story short, my grandfather got the cattle, as the contract required, but was asked by the broker never to do business with them again. N.B. Don't do this unless you're interested in financial silliness, or if the futures are really badly mispriced. It is a lot easier, and you get to see the cattle first, if you buy through a local cattle auction.
- cerberusss 7y ago
  Marvelous story, thanks for sharing.
- mcv 7y ago
  I don't know. Somebody has to take delivery of the cattle, so why not the guy who wants some cattle?
  - baq 7y ago
    yeah, this just makes the whole business of futures trading seem like a scam where the people actually interested in the things being traded are pawns.
  - chrisco255 7y ago
    People do take delivery on commodities obviously but you don't want to go through a speculator for this.

caseysoftware 7y ago

I'd love to hear from someone that got stuck with the 1000 bushels of corn (or similar). What do you do? How in the world do you manage that?

draw_down 7y ago
I remember this happened once, to someone who bought cocoa on the commodities market.
lozaning 7y ago
There's a story online thats floated around for a while about a guy that ended up with like 10 tonnes of coal this way. Was delivered via barge somewhere if I recall correctly. Edit: finally found it: https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery
whatok 7y ago
John C. Hull - Options, Futures, and Other Derivatives has details on an accidental cattle futures physical settlement. https://www.passeidireto.com/arquivo/73586616/john-c-hull-options-futures-and-other-derivatives-pearson-2017/19 https://www.passeidireto.com/arquivo/73586616/john-c-hull-op...
koheripbal 7y ago
There are services you can call to help you out of this predicament. Obviously they charge a huge margin.
bluGill 7y ago
Worse it isn't 1000 bushes at your home it is at some transfer point several states away. If you are lucky it is an elevator that sends you a bill for storage and can unload them. If you are unlucky you need to get a truck (with a driver) there on short notice to get it out of there.
- lonelappde 7y ago
  What if you just don't? You probably just get a larger bill.
  - pas 7y ago
    Sure, but that can become a very big bill fast. Basically they can charge you (almost) whatever they want.
cecilpl2 7y ago
https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery
Qworg 7y ago
There's a great Planet Money story on the Onion King. https://www.npr.org/sections/money/2018/09/19/649273647/episode-657-the-tale-of-the-onion-king https://www.npr.org/sections/money/2018/09/19/649273647/epis...
- selimthegrim 7y ago
  You know, why didn’t Louis Sachar write a YA book about this?
- mrnobody_67 7y ago
  That was an amazing episode
gezh 7y ago
If I remember correctly, in contrast to WTI, you will get assigned a shipping/warehouse certificate for wheat/corn in a designated elevator somewhere. You'll have to pay the warehouse a daily carry cost but don't actually have to take it out of that warehouse (you can if you want to).
- hkmurakami 7y ago
  That reminds me of the GS Aluminum storage warehouse story.

ISL 7y ago

My grandfather in Colorado did the opposite once in the 1970s. He needed some cattle, so he bought a small quantity of cattle futures of some form (I was too young when I heard the story to remember the details) from a broker/commodity trader in Chicago. When the contract approached the settlement date, the broker called to ask him to sell. Trouble was, my grandfather just wanted cows, not cash. The broker was frustrated to no end. Long story short, my grandfather got the cattle, as the contract required, but was asked by the broker never to do business with them again. N.B. Don't do this unless you're interested in financial silliness, or if the futures are really badly mispriced. It is a lot easier, and you get to see the cattle first, if you buy through a local cattle auction.

cerberusss 7y ago
Marvelous story, thanks for sharing.
mcv 7y ago
I don't know. Somebody has to take delivery of the cattle, so why not the guy who wants some cattle?
- baq 7y ago
  yeah, this just makes the whole business of futures trading seem like a scam where the people actually interested in the things being traded are pawns.
- chrisco255 7y ago
  People do take delivery on commodities obviously but you don't want to go through a speculator for this.