Last Trading Day
Candlefocus EditorContract specifications can be found on the website of the exchange where the derivative contract is being traded. Depending on the type of contract, there will be different expiration dates as stipulated in the contract. Futures contracts that are left open beyond the last trading day of the contract will be subject to either delivery or cash settlement. Similarly, any options contracts left open after the last trading day of the contract will need to take delivery of or provide the underlying asset.
It should be noted that the last trading day is not always equal to the expiration date. Usually, the last trading day will be the day before the contract's expiration date and it is marked by a dramatic increase in volume and volume of trade. That being said, it is worth noting that if the contract is deemed to be worthless, it need not be closed and can simply be allowed to pass until the expiration date.
In sum, the last trading day of a derivative contract is a date that can have financial consequences for those involved in the markets. By understanding their associated contracts and the material differences between a contract's expiration date and its last trading day, market participants can ensure they meet the settlement requirements of their contracts and avoid any unnecessary financial losses.