Current delivery is a term that is used to describe when the delivery of an underlying commodity related to a futures contract is expected to be delivered or settled with the buyer. This particular type of delivery typically means that the settlement date is slated for later in the current month, or may occur no later than a specific date in the upcoming month. Depending on the proximity of the date agreed upon between the buyer and the seller, a current delivery date may also be referred to as a near delivery date, implying that the delivery will take place in a short period of time, and not in the long-term.
The presence of a current delivery in a futures contract is helpful for both the buyer and the seller. The buyer knows exactly when the final date for tendering payment is expected, as well as when he or she can assume full possession of the commodity in question. For the seller, the current delivery makes it possible to know when payment will be received and when it will be necessary to prepare to release the commodity to the buyer. Knowing this date is especially important if the terms of the contract require the seller to make arrangements to ship the commodity to whatever location that is desired by the buyer, since it provides the seller with time to make those arrangements and ensure the delivery is on time.
There are also futures contracts that are structured with a series of settlement dates, effectively creating an agreement to deliver a portion of the commodity identified in the contract on or before each of the identified dates. When this is the case, the current delivery usually refers to the next delivery date in the sequence that has not already been settled. For example, if one of those delivery dates was settled in the past week, it no longer has the status of a current delivery; the next date in the sequence now is identified using the term.
It is important to note that while the current delivery sets a specific date for the next portion of the futures contract to be completed, that does not necessarily mean that no action can take place until that date arrives. Depending on how the contract terms are written, it may be possible to settle that particular delivery on a date that is before that current delivery. Whether this is actually in the best interests of the parties involved with the contract will depend a great deal on current market conditions and what type of safeguards are built into the text of the contract to allow for an early settlement.