Cheapest to Deliver - CTD
The least expensive underlying product that can be delivered upon expiry to satisfy the requirements of a derivative contract.
Investopedia Commentary
Certain derivative products provide contract holders the right to deliver different grades of underlying stocks, bonds, or commodities at specific delivery or expiry points. Because investors will always want to deliver the cheapest available underlying, the price of derivatives will always factor the CTD product.
Related Links
Futures Fundamentals
See also: Commodity, Delivery Date, Derivative, Futures, Index Future, Underlying
Also spelled: CTD