Last Trading Day


DEFINITION of 'Last Trading Day'

The final day that a futures contract may trade or be closed out before delivery of the underlying asset or cash settlement must occur. By the end of the last trading day, the contract holder must be prepared to accept delivery of the commodity, or settle in cash if the position is not closed.

BREAKING DOWN 'Last Trading Day'

The holder of a futures contract is obligated to fulfill the terms of the contract, however, in most cases, delivery of the asset underlying the futures contract does not occur, as most investors use futures as a method to hedge or speculate on the underlying asset's price.

  1. Derivative

    A security with a price that is dependent upon or derived from ...
  2. Cash Settlement

    A settlement method used in certain future and option contracts ...
  3. Option

    A financial derivative that represents a contract sold by one ...
  4. Current Delivery

    A type of futures contract that requires the delivery of the ...
  5. Futures

    A financial contract obligating the buyer to purchase an asset ...
  6. Underlying

    1. In derivatives, the security that must be delivered when a ...
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