Futures contracts, unlike equities, have a limited lifespan as they have a specified date on which they expire. A contract’s expiration date is the last day you can trade that contract. Traders must manage their positions to these expirations and can do so by one of three ways:
- Close out the position
- Roll the position
- Let the contract expire, if a cash settled product (If a physically settled product, one must close or roll the position as TD Ameritrade Futures & Forex, LLC [TDAFF] does not allow for physical delivery)
Rolling a position is when a trader moves her position from the front month contract to another contract further in the future. When rolling forward, a trader will simultaneously close her current position and establish a new position in the next contract month. As mentioned above, TDAFF does not allow for physical delivery therefore one must pay close attention to the First Notice Day and Last Trading Day.
First Notice Day: The first day the exchange can assign delivery to accounts that are long futures contracts.
Last Trading Day: The last trading day a futures contract may trade or be closed before delivery.
**At TDAFF, clients must exit 2 business days prior to FND or exit 1 business day prior to LTD, whichever comes first.
On the Calendar tab in MarketWatch, on can see the Futures Liquidation date checking the Futures Liquidation box and typing in symbol.
Futures trading is speculative, and is not suitable for all investors. Please read the Risk Disclosure for Futures and Options prior to trading futures products. If you’re interested in learning more about futures, it’s important that you expand your investing education before you make investments. Examples provided for illustrative and educational use only and are not a recommendation or solicitation to buy, sell or hold any specific security or utilize any specific strategy. Futures and futures options trading services provided by TD Ameritrade Futures & Forex LLC. Trading privileges subject to review and approval. Not all clients will qualify.TD Ameritrade, Inc., member FINRA/SIPC. © 2021 TD Ameritrade. Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC).