Futures expiry contracts play a crucial role in financial markets. These contracts specify the date upon which a futures contract must be settled by either making or taking delivery of the underlying asset. As the expiry date approaches, traders need to closely monitor their positions to avoid any unwanted outcomes.
Various factors can influence the behaviour of futures contracts nearing expiry. Market conditions, supply and demand dynamics, as well as geopolitical events, can all impact the price movements leading up to the contract's expiration. Traders must understand these factors to make informed decisions.
Traders employ different strategies when dealing with futures contracts nearing expiry. This may involve rolling over positions, closing out contracts, or taking physical delivery of the underlying asset. Each strategy carries its own risks and rewards, requiring careful consideration.
In summary, futures expiry contracts are a fundamental aspect of the financial markets, with significant implications for traders and investors. By understanding the basics, monitoring influencing factors, and employing effective strategies, individuals can navigate the complexities of futures expiry with confidence.