Certified stocks

Certified stocks are the quantity of a commodity held in exchange-approved warehouses that has been inspected and graded as deliverable against a futures contract.

Certified stocks are the specific portion of a metal sitting in exchange warehouses that has passed inspection and is formally registered as eligible for delivery against a futures contract. Metal can sit in the same warehouse without being certified, if its owner has not requested or completed the inspection process, so certified stocks are always a subset of total warehouse inventory.

Traders watch certified stock levels closely because they show how much immediately deliverable supply exists, information that matters most when a market moves into backwardation and buyers need metal quickly. A sharp drop in certified stocks, especially when a large share sits in a few warehouses controlled by a small number of holders, has repeatedly been a precursor to short squeezes on metal exchanges.