What Is a "Delivery Squeeze" in the Context of Physically-Settled Commodities? ⎊ Path

What Is a “Delivery Squeeze” in the Context of Physically-Settled Commodities?

A delivery squeeze is a situation where a shortage of the physical underlying commodity or asset arises near the expiration of a futures contract. This shortage is often caused by a large short position struggling to acquire the asset for delivery, leading to a sharp, temporary increase in the spot price.

This is a risk in physically-settled markets.

What Is the Risk of a “Delivery Squeeze” in a Physically-Settled Futures Contract?

In Traditional Commodities, What Specific Event Often Causes Backwardation?

How Do the Delivery Mechanisms Differ between Physically Settled and Cash-Settled Futures Contracts?

Is a Negative Basis (Backwardation) More Common in Physically-Settled or Cash-Settled Markets?

Differentiate between a Market Manipulation Squeeze and a True Delivery Squeeze

What Are the Key Differences between a ‘Short Squeeze’ and a ‘Delivery Squeeze’?

What Does Persistent Backwardation in a Crypto Asset like Ether Suggest about Its Immediate Supply?

How Can a ‘Delivery Squeeze’ Introduce Basis Risk in Physical Settlement?

Glossar

Delivery Squeeze

Phenomenon ⎊ A delivery squeeze represents a rare but critical market condition, primarily in physically-settled futures or options markets, where the supply of the underlying asset available for delivery is severely constrained relative to the outstanding short positions.