Exchange Certified Stocks

Definition

The term exchange certified stocks refers to the quantities of commodities that have been certified as meeting the quality standards and deliverability by the exchange. Exchange certified stocks will be stored at delivery points designated as acceptable under the futures contract.

Explanation

Inventory staged and available to be delivered against a short futures position are known as certified stocks. Exchanges such as the Intercontinental Exchange, or ICE, report on a daily basis the level of certified stocks held in delivery points. Certified stocks of commodities can include those held in both depositories as well as warehouses certified by an exchange-approved inspection authority. Certified stock will range from agricultural products like corn through precious metals like silver, gold and platinum.

Typically, declining levels of exchange certified stock means there is an increase in commercial demand for the commodity while increasing levels of stock can reflect a decline in demand.

Related Terms

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