A Guide to Futures Market Expiration Dates
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Currency Futures: An Introduction
Firetip X Trading Platform Archives. Ironbeam FAQs. Futures contracts are typically divided into several usually four or more expiration dates throughout the year.
Each of the futures contracts is active can be traded for a specific amount of time. The contract then expires and cannot be traded anymore.
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The date upon which a futures contract expires is known as its expiration date. Expiration dates are fixed for each futures contract by the exchange that provides the market, such as the ones owned by CME Group , for example. The expiration dates for U. Many other kinds of futures contracts expire on different dates, depending on the exchange that handles the contracts. Be aware of the expiration date for the specific contract you are trading; it will be stated in the contract language.
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If you notice a drastic decline in volume from one day to the next, you are likely nearing expiration on that futures contract, as most traders have switched to trading a contract with an expiration date further out. You can also look up expiration dates on the website of the exchange on which a contract is listed.
To see the expiration date for your specific futures contract listed on a CME Group exchange:.
Currency Futures: An Introduction
To see the expiration date for your specific futures contract listed on the ICE, or Intercontinental Exchange:. Expiry dates for futures products traded on other exchanges can be found in a similar fashion on the appropriate exchange's website. In addition, some trading platforms also indicate when a futures contract expires. Most futures contracts are not held until expiration, and so there is no exchange of, for example, barrels of oil. Rather, traders simply make money off the price fluctuations in the futures contract following their trade.
Still, the true purpose of a commodity futures contract is to exchange goods for cash at some future date.
The expiration date represents the day when that cash-for-physical-goods transaction takes place. Futures have an expiration date because farmers and commercial goods producers use the futures market to buy or sell goods at pre-determined contract prices at a future date. This is also why most short-term traders get out of their futures positions before they expire, as they don't want to physically buy or sell the underlying product. If the trader wants to maintain their position in the underlying product, the trader can place a trade in another futures contract with an expiry date that is further out.
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