In a Physically Settled Contract, What Is the Term for the Quality and Location of the Asset?
The terms for the required quality and location are specified in the contract's "Delivery Specifications." The quality is often standardized (e.g. 'West Texas Intermediate crude oil'), and the location is the 'Designated Delivery Point' (e.g.
Cushing, Oklahoma for WTI futures). These specifications are crucial for price convergence.
