Futures Expiration Dates
Futures contracts are based on commodities brought to exchange and bought by parties that need them. Corn, oil, beef, precious metals, and other materials are examples of items that are bought and sold on exchanges. Investment companies use these products to create securities. They then sell them on the exchanges. Futures contracts (the securities) are traded based on the prices of the underlying products. That means the prices of the securities rise and fall with the prices of the products. As well as following the price changes, the futures contracts have expiration dates that match the expiration date of the commodity contract. Many kinds of futures contracts expire on different dates. Their expiration date are also based on the exchange that handles the contracts. Be aware of the expiration date for the contract you are trading; it will be stated in the contract language. 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 a date further out. Futures contracts are divided into several (usually four or more) expiration date throughout the year. Each of the futures contracts is active (can be traded) for an amount of time. The contract then expires and cannot be traded anymore. The date upon which a futures contract expires is known as its “expiration date.”
Expiration Dates for Stocks, Indexes
The expiration dates for U.S. stock and stock index futures contracts fall on the third Friday of every third month. This table shows these dates through 2024.
Go to cmegroup.com, and put your cursor over Markets. Click on the category your futures contract belongs to. Find your contract, and click on the link. Click on the Calendar tab. Note the contract (month) you are trading, and look for the Settlement date.
To see the expiration date for your specific futures contract listed on the ICE or Intercontinental Exchange:
Go to theice.com, click on Markets, and then on a category of product. Click on ICE Product Guide. Find the product you’re trading, and click on it. Note the contract (month) you are trading, and look for the Last Trading Day.
Expiration dates for futures products traded on other exchanges can be found the same way on the exchange’s website. In addition, some trading platforms also show when a futures contract expires.
Why Futures Contracts Expire
Most futures contracts are not held until expiration, so there is no exchange of barrels of oil or corn. Instead, traders make money off the price changes in the futures contract when they 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-goods exchange takes place. Most short-term traders get out of their futures positions before they expire, because they don’t want to take the product. If the trader wants to maintain their position in the product, they can place a trade in another futures contract with an expiration date that is further out.
