last trading day

Last Trading Day

The final day that a futures or options contract may trade or be closed out before delivery of the underlying asset must occur.

Notes:

If the buying and selling parties do not arrange an alternate agreement, the physical commodity must be delivered from the seller to the buyer. For example, if you were long on a pork belly futures contract and didn't close out the position by the end of the last trading day, you should be prepared to accept delivery of real pork bellies.

See also: Cash Settlement, Current Delivery, Delivery Month, Derivative, Futures, Option, Underlying

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Last trading day

The final day under an exchange's rules during which trading may take place in a particular futures or options contract. Contracts outstanding at the end of the last trading day must be settled by delivery ofunderlying physical commodities or financial instruments, or by agreement for monetary settlement, depending futures contract specifications.

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last trading day

1. The day on which a trader must liquidate a futures position or else be required to receive (if long) or make delivery (if short). Following this day, the particular contract will cease trading.

2. The last day on which a particular option is traded. Currently, this day is the third Friday of the expiration month.