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. Pork Bellies

    A cut of pork that comes from the belly of a pig. Pork bellies ...
  2. Close

    The end of a trading session in financial markets. "Close" refers ...
  3. Closing Price

    The final price at which a security is traded on a given trading ...
  4. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  5. Settling Price

    The price used daily by clearing houses to clear all trades and ...
  6. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
RELATED FAQS
  1. How can I profit from a decline in the drugs sector?

    Profit from a decline in the drugs sector by short selling or by purchasing futures contracts or put options. Investors use ... Read Full Answer >>
  2. What other precious metals are there beyond gold and silver?

    Besides gold and silver, the other precious metals are platinum, palladium, ruthenium, rhodium, osmium, rhenium, germanium, ... Read Full Answer >>
  3. What other options does an investor have to buying physical silver?

    A wide variety of investment options are available to traders wishing to invest in the silver market. Buying physical silver ... Read Full Answer >>
  4. How can I profit from a fall in the automotive sector?

    You can profit from a fall in the automotive sector by short selling automotive stocks and exchange-traded funds (ETFs) or ... Read Full Answer >>
  5. What countries have the largest gold reserves?

    The United States holds the largest stockpile of gold reserves in the world by a considerable margin. In fact, the U.S. government ... Read Full Answer >>
  6. Why are futures contracts important?

    On the surface, futures contracts are an instrument of price speculators who want to hedge a price risk or profit from coming ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Your Futures Are In Good Hands With CTAs

    Profit from up, down and sideways markets with commodity trading advisors.
  2. Active Trading

    Grow Your Finances In The Grain Markets

    Hedging with futures can protect those who buy and sell commodities from adverse price movements.
  3. Active Trading

    Take A Tour Of The Futures Trading Pit

    Discover why controlled chaos can mean an exciting investment experience for you.
  4. Options & Futures

    Trading Gold And Silver Futures Contracts

    If you are a hedger or a speculator, gold and silver futures contracts offer a world of profit-making opportunities.
  5. Options & Futures

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  6. Active Trading

    Learn To Corral The Meat Markets

    Find out how to trade these hog-wild commodities.
  7. Insurance

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  8. Chart Advisor

    Watch Out For Falling Copper Prices

    Commodity traders have been turning their attention toward copper prices over the past several weeks.
  9. Active Trading Fundamentals

    Where And How Should You Make Your First Trade?

    New traders should enter markets that offer the greatest opportunity for learning their craft while keeping risk at a minimum.
  10. Economics

    Ending The Limits On U.S. Crude Oil Exports

    As US storage capacity reaches its limit, industry participants and their lobby groups in Washington are calling for an end to the crude oil exports ban.

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center