What Is the Function of a “Delivery Notice” in a Physically-Settled Contract?

A delivery notice is a formal document issued by the clearing house to the holder of a short futures position, notifying them of their obligation to deliver the physical commodity to the long position holder. It specifies the commodity, quantity, and location for delivery.

This notice initiates the physical transfer process, and the short position holder must then prepare the commodity for delivery according to the contract specifications.