This may not be an appropriate solution, as it may make it difficult for the “long” to chalk out his strategy, when he remains unclear till the settlement date as to whether he is going to get the cash, or the physical securities. 43.
There is also a view that the option of choosing the security may be given to the “long” which may help him to avoid taking delivery of illiquid CTD bonds. In such case, the buyers will naturally prefer the expensive security to be delivered to him.