What Is Depreciable Property? Depreciable property is any asset that is eligible for tax and accounting purposes to book depreciation in accordance with the Internal Revenue Service’s (IRS) rules. Depreciable property can include vehicles, real estate (except land), computers, office equipment, machinery, and heavy equipment. Depreciable property items are considered long-term assets. Key Takeaways Depreciable
What Is a Delivery Instrument? A delivery instrument is a contractual document that is traded as part of a commodity futures contract. It entitles the holder to physical delivery of a specified quantity of the commodity in question, such as soybeans in the case of soybean futures contracts. Delivery instruments are an important part of
What Is a Delivery Month? The term delivery month refers to a key characteristic of a futures contract that designates when the contract expires, and when the underlying asset must be delivered or settled. The exchange on which the futures contract is traded also establishes a delivery location and the date within the delivery month
What Is a Delivery Notice? In the commodities futures markets, delivery notices are a document provided by the seller of a futures contract. The document serves as confirmation that the seller intends to honor their contract by physically delivering the underlying commodity to the futures holder. By contrast, when a futures contract is cash settled
What Is a Delivery Option? A delivery option is a feature added to some interest rate futures contracts. The delivery option permits the option seller to determine the timing, location, quantity, quality, and the wildcard features of the underlying commodity, which is set to be delivered. Delivery option terms are stated in the delivery notice. Understanding Delivery Option Interest
What Is a Delivery Point? The delivery point, in futures contracts or other derivatives, is the location where the physical commodity underlying the contract will be delivered. The futures contract buyers who maintain their position must be ready to accept the delivery and pay the agreed-upon price for the physical commodity. However, the delivery point applies only
What Is the Delivery Price? The delivery price is the price at which one party agrees to deliver the underlying commodity and at which the counter-party agrees to accept delivery. The delivery price is defined in a futures contract traded on a registered exchange or in an over-the-counter forward agreement. The delivery price is set
What Is Delta? Delta (Δ) is a risk metric that estimates the change in price of a derivative, such as an options contract, given a $1 change in its underlying security. The delta also tells options traders the hedging ratio to become delta neutral. A third interpretation of an option’s delta is the probability that
What Is Delta Hedging? Delta hedging is an options trading strategy that aims to reduce, or hedge, the directional risk associated with price movements in the underlying asset. The approach uses options to offset the risk to either a single other option holding or an entire portfolio of holdings. The investor tries to reach a
What Is Demand? Demand is an economic concept that relates to a consumer’s desire to purchase goods and services and willingness to pay a specific price for them. An increase in the price of a good or service tends to decrease the quantity demanded. Likewise, a decrease in the price of a good or service
