Define: Cheapest To Deliver

CTD is a legal term used in the financial industry to refer to the specific security that is the cheapest to deliver when fulfilling a futures contract.

The CTD is determined based on the lowest cost of delivering the underlying asset of a futures contract, taking into account factors such as transportation costs, storage costs, and other relevant expenses.

CTD is important because it affects the pricing and settlement of futures contracts, and can impact the profitability of trading in the futures market.

Yes, the CTD can change over time due to fluctuations in the costs associated with delivering the underlying asset, as well as changes in market conditions.

Yes, there are regulations and guidelines set by regulatory bodies such as the Commodity Futures Trading Commission (CFTC) that govern the determination and use of CTD in the futures market.

Traders can use knowledge of CTD to their advantage by understanding how it affects the pricing and settlement of futures contracts, and making informed trading decisions based on this information.

If you believe that the determination of CTD is incorrect or unfair, you may have the right to dispute it through the appropriate channels, such as filing a complaint with the relevant regulatory authority.

CTD differs from other delivery options in futures trading in that it specifically refers to the security that is the most cost-effective to deliver, as opposed to other delivery options that may be based on different criteria.

Information about CTD for specific futures contracts can typically be found in the contract specifications provided by the exchange where the futures are traded, as well as through market data providers and financial news sources.