Quarter-end close: the four breaks that show up every time

Two days before the 30th: the four break types that move every quarter-end close, and the check that catches each one this week.

Two days before quarter-end, the close is still fixable. The four breaks below cause most of the gap between where the books say the desk stands and where it actually stands. Check all four before the 30th and the number you sign is the number you can prove.

Why does the quotation period break first?
The quotation period breaks first because the purchase QP and the sales QP rarely match, and the basis moves in the gap. One leg prices on September average, the other on October, and the position carries the difference until someone prices both legs on the right dates. Pull every open parcel and confirm the QP on the buy side and the sell side matches the contract, not the booking default.

Copper October QP against a September sale is the classic form. The fix is small and specific: re-price each leg on its contract QP, keep the LME basis beside it, and the drift shows line by line. LME and MCX live on screen; COMEX and SHFE computed into the arbitrage view.

Which broker legs are still unconfirmed?
Unconfirmed broker legs break the close because the hedge the desk thinks it holds is not the hedge the broker confirms. A fill booked internally on Friday, a confirmation that arrives Monday with a different prompt date or tonnage, a correction that sits in an inbox. Until the two match, exposure reads covered when it is not.

Ask for the confirmations today, not on the 30th. Match account, prompt, tonnage and price against the internal hedge book, one line at a time. Anything without a matching confirmation stays open on the sheet.

What went out invoiced short?
The short-priced invoice breaks the close because metal has already left on a price that was never the price. Provisional pricing, a QP taken from the wrong month, a premium left off the line. The tonnage is gone and the correction now needs a credit note and a counterparty conversation.

Run the invoices raised since the last close against contract pricing terms. Where the price on the invoice does not tie to the contract QP and premium, hold the parcel out of the closed number and raise the correction before quarter-end locks it in.

Has the hedge drifted from the physical it was placed against?
The drifted hedge breaks the close because the physical changed shape after the hedge went on. A shipment split across two vessels, a delivery pushed a week, a parcel diverted to a second buyer. The hedge still reads against the original shape, so coverage looks right in total and wrong on every line that moved.

Re-match each hedge to the physical as it stands today, not as it stood at dealing. Where the dates or tonnage no longer line up, move the hedge or book the difference as open. A hedge that matched last week is not evidence it matches now.

Run the four before the 30th and the close stays a close.