Method and system for consolidating commodity futures contracts having guaranteed physical delivery

A method of guaranteeing physical delivery for market participants having cargo-size positions, the method comprising:

• identifying open first-nearby time positions, the open first-nearby time positions including:
• a first number of open cargo-size long positions;
• a second number of open cargo-size short positions;
• less than cargo-size long positions;
• and
• less than cargo-size short positions;
• matching any open cargo-size long positions with any open cargo-size short positions;
• if the first number equals the second number, then bringing remaining open first-nearby time positions to zero;
• if the first number is less than the second number, then matching unmatched cargo-size short positions with less than cargo-size long positions of long participants, increasing the less than cargo-size long positions to cargo-size long positions and adjusting a second-nearby time position of the long participants;
• and
• if the first number is greater than the second number, then matching unmatched cargo-size long positions with less than cargo-size short positions of short participants, increasing the less than cargo-size short positions to cargo-size short positions and adjusting a second-nearby time position of the short participants, thereby guaranteeing physical delivery to participants having cargo-size first-nearby time positions.

A computer system for automatically consolidating futures contract position of to guarantee physical delivery of a commodity, the system comprising:

• one or more communications links receiving market participant position information, the position information including identification of open first-nearby time long positions and open first-nearby time short positions;
• one or more processors configured to:
• match open first-nearby time long positions first-nearby time short positions received from the communication links;
• make additions to or subtractions from open first-nearby time positions less than a certain size;
• and
• adjust market participant second-nearby time positions based on the additions to or subtractions from open first-nearby time positions.

A method of receiving guaranteed physical delivery of a cargo-size position in a futures contract, the method comprising:

• establishing an open first-nearby time future position;
• being matched to an opposite open first-nearby time future position of a market participant;
• and
• entering into a physical market contract based on the futures contract with the market participant, the physical market contract resulting in physical delivery.