[centimeter]

> If you get into the market for physically settled contracts with no intention of taking delivery, then you're almost certainly a speculator.

Hard disagree. There are lots of reasons people with legitimate hedging concerns who don't intend to take physical delivery prefer the physical contract to a CSC (if it's even available).

[AnimalMuppet]

Would you list some of those reasons, instead of just making the bare assertion?

[centimeter]

* Higher liquidity, lower slippage

* Different regulatory capital requirements

* Some commodities don't have cash settlement

* Sometimes a CSC doesn't count (as much) from a regulatory/insurance perspective if you're hedging a position in a commodities basket or whatever

I'm sure there are more - I don't work in commodities.

[TuringNYC]

These futures contracts are for delivery at a specific location. What if you just dont want a million barrels 2000 miles away? Cash settled seems a lot more flexible for lots of industrial use.