Contract Expiry

Contract expiry refers to the moment when a trading contract ends or is deemed void, usually due to the fulfilment of the buyer and seller's contractual obligations. This is particularly relevant in derivatives trading, including contracts for difference (CFDs).

Key Points:

  1. Contracts for Difference (CFDs): CFDs allow traders to speculate on the price movements of an asset without owning the underlying asset. This means you can capitalize on market fluctuations while avoiding the costs and complexities of direct ownership.
  2. Symbols: Contracts often have specific symbols that include a mix of letters and numbers, indicating different contract specifications. These symbols may denote various characteristics of the contract, including the underlying asset and the expiry details.
  3. Expiry Dates: The final three characters of the contract symbol typically indicate the pertinent month of expiry. This helps traders identify when a contract will cease to exist, allowing for better planning and execution of trades.
  4. Importance of Expiry: Understanding contract expiry is crucial for traders, as it affects trading strategies, risk management, and the timing of trades. Failing to close positions before expiry can lead to automatic settlement or financial losses.

The pertinent month of the year is indicated by the final three characters.

JANUARY F JULY N
FEBRUARY G AUGUST Q
MARCH H SEPTEMBER U
APRIL J OCTOBER V
MAY K NOVEMBER X
JUNE M DECEMBER Z
YEAR (2024) 24