The term alternative delivery procedure refers to a clause appearing in a futures contract that allows a buyer and seller to deliver and receive the commodity in a manner that deviates from the standard contract terms and conditions. Once the long and short positions are matched, an alternative delivery procedure may be invoked at any time during the specified delivery timeframe.
If the counterparties to a contract wish to take their matched position off the exchange, they may do so by entering into an alternative delivery procedure, or ADP. Once agreed to, the counterparties would notify their clearing members, who are responsible for relaying the information to the centralized clearing counterparty. There are no fees associated with entering into an ADP. The only requirement involves notification of the agreement through clearing members.