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Last Trading Day

What does Last Trading Day mean?

In futures markets, the last trading day is the day immediately preceding a contract's expiration date for an option or futures contract. This is the final day during which trading may take place in the particular futures or options contract.

Futures Knowledge Explains Last Trading Day

For example, if a futures contract has an expiration date of Thursday, August 27, 2015, the contract's last trading day would be Wednesday, August 26, 2015. Contracts outstanding at the end of the last trading day, August 26, 2015 must be settled by delivery of underlying assets either by physical delivery or cash settlement, depending futures contract specifications. In futures markets, generally investors use derivatives as hedging tools rather than physical delivery and so most of investors use last trading day to sell the contract in the market and relinquish their obligations.

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