redemption in the form of physical delivery of the underlying instrument.
The transfer of the underlying commodity from the seller of a futures contract to the buyer of a futures contract. Each futures exchange has specific procedures for delivery of a physical commodity. Some futures contracts, such as stock index contracts, are cash settled.
A derivative instrument has physical delivery if it settles with actual delivery of some underlier.
Settlement of a contract by the delivery or receipt of a financial instrument or commodity. Contrast with cash settlement, where no delivery of an underlying physical asset takes place.
Delivery of securities (or certificates evidencing ownership rights) to the buyer's custodian.