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What is the expiry date of future?
An expiration date in derivatives is the last day that derivative contracts, such as options or futures, are valid. On or before this day, investors will have already decided what to do with their expiring position.
How expiry dates are written?
Read these codes as MMDDYY, where “MM” refers to the month, “DD” refers to the date, and “YY” refers to the year. This is one of the more common codes that you’ll see on food items. For example, “121518” would be read as December 15, 2018.
How futures are settled on expiry?
Index futures contracts are settled in cash and the closing index value on the date of the expiry of the contract is considered as the settlement price for index futures. This particular contract expires on July 27, being the last Thursday of the contract series.
Can I sell futures on expiry date?
It is not necessary to hold on to a futures contract till its expiry date. In practice, most traders exit their contracts before their expiry dates. You can do so by either selling your contract, or purchasing an opposing contract that nullifies the agreement.
What happens if you hold a futures contract until expiration?
The futures expiration day is when a futures contract will cease to exist. Holding a contract past this expiration date will trigger obligations for you to purchase the underlying asset. Options provide you the option to exercise your rights. Long or short the futures contract into expiry you will be exercised.
Why do futures have expiry dates?
Why Futures Contracts Expire Futures have an expiry date because farmers and producers use the futures market to buy or sell goods at contracted prices. This is also why most short-term traders get out of their futures positions before they expire. They don’t want to take the product.
What happens when F&O expires?
What happens on F&O expiry day? Contracts are adjudicated on the day they expire (or in the case of Options, they basically expire). You can do this in one of two ways: buy another contract that eliminates your current one, or pay off in cash.