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What is the procedure when a futures contract expires?
Cornèrtrader does not provide for the physical delivery of the underlying asset when the Futures Contract expires. Instead, you should ensure that any Futures Contracts in which you have a position are closed before the relevant date. The relevant date will be either the expiry date or the first notice date (FND) of the respective Futures Contracts. The procedure is as follows:
- if the expiry day is prior to the first notice day (FND) the contract is to be closed on the expiry day.
- if the FND is on the same day, or is prior to the expiry day, the contract is to be closed on the trading day prior to the FND.
Futures positions not closed before the relevant date shall be closed by Cornèrtrader on your behalf at the first available opportunity at the prevailing market rate.
What is cash and physical settlement?
When a contract is settled up with a cash payment, this is cash settlement. Where, instead, the underlying is received/delivered, this is physical settlement. Cornèrtrader does not support physical delivery. Physical settlement is the practice with most agricultural and energy products, though some financials also entail physical delivery.
How can I know whether a contract is for cash or physical settlement?
Where a Notice Day is indicated on your trade ticket your contract provides for physical settlement (see example below).
How does the expiry day differ from the notice day?
Notice Day specifies the day when the contract goes into the "notification period" and where long positions can be assigned delivery. Expiry day is the day when the contract expires, after which it can no longer be traded. The two dates may sometimes coincide.
Why, on its expiry, does my futures position continue to be displayed?
This is a peculiarity solely of cash-settled future contracts that are held until expiry. Until the final settlement price is available, the position of clients holding cash-settled futures contracts at expiry is locked and is booked out manually by Cornèrtrader back office. This situation normally lasts for 1-2 trading days after Expiry Date. It can be averted by rolling or closing your position before contract expiry.
What is the settlement price?
The settlement price is the price at which you will close your positions. It is received from Cornèrtrader's brokers (and may differ from the settlement price you see from the exchange).