Wild Card Play

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DEFINITION of 'Wild Card Play'

Having the right to deliver on a futures contract at the last closing price, even though the contract is no longer trading. A wild card play occurs when a contract holder retains the right to deliver on the contract for a given period of time following the close of trading at the closing price. This will end up financially benefiting the contract holder if there is a shift in the value or price of the asset between the time of the closing price and the actual delivery.

BREAKING DOWN 'Wild Card Play'

Having the right to a wild card play allows the holder to deliver the cheapest to deliver issue, regardless of the value of that issue at the time at which the contract expired. The specified time at which delivery can take place varies from contract to contract depending on the rights granted to the holder of the wild card play. This situation is similar to a wild card option on an options contract.

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RELATED FAQS
  1. What is a wild-card play?

    A wild-card play is a term related to futures contracts. A future is a financial contract obligating a buyer to purchase, ... Read Full Answer >>
  2. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  3. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
  4. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  5. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  6. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>

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