How does Futures expiry work?

Physical delivery

With Saxo Markets, you avoid physical delivery of the underlying asset on the expiry of a Futures contract, which is not supported. Therefore, we advise you to take note of the expiry and first notice dates (FND) of any Futures Contracts in which you have positions and ensure they are closed before the appropriate day, as described below.

For some contracts, the FND that Saxo Markets utilises could be several days earlier than the FND provided by the relevant exchange. Please always refer to the trading conditions displayed on the contract in the trading platform as well as the trade ticket to see the specifications for each contract before trading.  

• If the expiry day is prior to the first notice day (FND) (as utilised by Saxo Markets), the contract will be closed on the expiry day.
• If the FND (as utilised by Saxo Markets) is the same or prior to the expiry day, the contract will be closed the weekday prior to such FND.
• If futures positions are not closed before the relevant date, Saxo Markets will close the position(s) on your behalf at the first available opportunity at the prevailing market rate. Clients who have not closed their positions in a timely fashion, as described above, will incur additional charges.

What are cash and physical settlements?

Cash settlement is when a contract is settled by way of cash. A physical settlement is when the underlying contract has physical delivery. Saxo Markets does not support physical delivery. This is the case for most agricultural and energy products, however, some financials also have physical delivery. 

Where do I see if a contract is for cash or physical settlement?

If there is a Notice Day on your trade ticket, then your contract is settled physically.

What is the difference between expiry and 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 the contract expires and is no longer tradable. Sometimes the two are equal.

Why does my futures position not disappear at expiry?

This only happens with cash-settled contracts that are held until expiry. On cash-settled futures contracts, clients holding positions at expiry will have their positions locked until the final settlement price is available, and booked out manually by our Back Office - this normally takes 1-2 trading days after the Expiry Date. You can avoid this by rolling or closing your position before the expiry of the contract.

What is the settlement price?

The settlement price is the price you will close your positions at and is received from Saxo Markets’s brokers (and may differ from the settlement price you see from the exchange.)