What does Deliverable Grades mean?
Deliverable Grades are standard quality grades of commodities fixed by the commodity exchanges. The minimum quality of the commodity is specified in the futures contract which is agreed upon by both parties to the futures contract. These grades are to be met while making delivery of the commodities. Deliverable Grades are also known as Contract Grades.
Futures Knowledge Explains Deliverable Grades
There are various varieties of any commodity available in the market. In order to standardize futures contracts, the different grades of a commodity have been officially approved by an exchange as deliverable in settlement of a futures contract. For example, in case of crude oil, Brent and NYMEX WTI are the major officially approved variant available. These are mentioned in the future contract note to avoid any future dispute.