Split Close

AAA

DEFINITION of 'Split Close'

A situation that refers to price differences within a series of final daily futures-contract transactions occurring at the close of a trading session. A split close occurs if more than two contracts with the same underlying, trade at different prices during the final minutes of the markets. Split closes are a common occurrence on futures exchanges.

INVESTOPEDIA EXPLAINS 'Split Close'

A split close happens when contracts with the same underlying instrument, but different maturity dates, have different closing prices. A futures contract is a type of derivative instrument in which a buyer and seller agree to transact a set of financial instruments or physical commodities for future delivery at a specified date and price.


A number of contracts are available at any one time for a particular instrument, based on the month that the contract expires. For example, the contract months for corn futures are March (H), May (K), July (N), September (U) and December (Z). If the March and May contracts have different closing prices, a split close occurs. For example, a split close also happens if a July corn contract has a positive gain at the close, while a September corn has a loss.

RELATED TERMS
  1. Close

    The end of a trading session in financial markets. "Close" refers ...
  2. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  3. Pork Bellies

    A cut of pork that comes from the belly of a pig. Pork bellies ...
  4. Settling Price

    The price used daily by clearing houses to clear all trades and ...
  5. Closing Price

    The final price at which a security is traded on a given trading ...
  6. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
Related Articles
  1. Your Futures Are In Good Hands With ...
    Options & Futures

    Your Futures Are In Good Hands With ...

  2. Grow Your Finances In The Grain Markets
    Active Trading

    Grow Your Finances In The Grain Markets

  3. Take A Tour Of The Futures Trading Pit
    Active Trading

    Take A Tour Of The Futures Trading Pit

  4. Trading Gold And Silver Futures Contracts
    Options & Futures

    Trading Gold And Silver Futures Contracts

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center