Margin and Contract Lifecycle · Futures Trading Guide
Expiration is a process with several deadlines. The last charted trading day may not be the date by which your broker requires a position to be closed.
Read the delivery mechanism
Some contracts settle through delivery of an asset and others through a cash calculation. The product family alone is not sufficient evidence. Two contracts linked to the same commodity can have different delivery terms. A deliverable currency future can create currency obligations, while a cash settled index future uses its specified final reference value.
Create a deadline sequence
Record first notice day where applicable, last trading day, final settlement date and the broker’s earlier closeout deadline. Delivery exposure can begin before the last trading day. Notice arrangements differ across exchanges and products, so a generic reminder on the expiration date is inadequate. Confirm the timezone and how holidays change the calendar.
Distinguish settlement from the last quote
Assume a fictional long index future has a $10 multiplier. Its previous settlement is 5,000 and final settlement is 4,992. The final daily adjustment is an $80 debit. The final settlement method may use an opening calculation or reference window rather than the last screen quote. Total trade profit still includes earlier daily settlements and costs.
Close deliberately if delivery is unintended
Confirm that the closing order filled in the correct maturity and quantity. Check the remaining position and cancel related orders that could reopen exposure. Never rely on the broker to exit at a favourable price. If a notice has already been assigned, obtain the applicable operational instructions because ordinary assumptions about offsetting may no longer be enough. Paper trading should rehearse the deadline workflow as carefully as the entry signal.
Try it yourself
Your broker requires exit on Tuesday, first notice is Wednesday and last trading is Friday. Which deadline governs a trader who cannot take delivery?
Show the worked answer
The broker’s Tuesday deadline is the immediate operational constraint. The trader should plan earlier and verify the position is closed, while retaining the exchange dates in the checklist.
Further reading
Educational material. Prices, margins and strategy examples are hypothetical unless explicitly identified as contract specifications. They are not trade recommendations. Futures losses can exceed deposited collateral. Product terms and eligibility vary by venue and jurisdiction.
