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Retender

Passing on a delivery notice you have been assigned by reselling the contract and issuing a fresh notice, rather than paying for and keeping the commodity.

Some contracts allow a long who receives a notice before the last-trading-day to sell a futures contract and retender the notice to the new long on the next business day. It is the escape hatch for a trader who does not want the physical.

Retendering is not free: it costs a day of financing, exchange fees, and exposure to the price move between assignment and resale. It is also not available in every product or on every day of the delivery-period, which is why relying on it as a plan is dangerous.

Example: assigned a silver notice on 3 December with the last trading day on 29 December, a long sells one December contract and retenders. The cost is roughly one day of carry on $150,000 of metal, perhaps $20, plus fees — far better than arranging vault storage.

Related: delivery-notice, stopping-delivery, last-notice-day, delivery-period, warehouse-receipt

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