Is it possible to retain futures positions post their expiration?
No, futures positions cannot be retained in the same contract after its expiration. Upon expiry, all futures contracts are mandatorily settled—either through cash settlement or physical delivery, depending on the asset.
Maintaining exposure post-expiry
To continue holding a position beyond the current contract’s expiry, traders must rollover their position:
- Sell the current expiring contract
- Buy the same asset’s contract for a later expiry (next month, quarter, etc.)
This must be done before expiry to avoid automatic settlement.
Example
Suppose you hold a March futures contract for shares of ABC Ltd. and want to maintain exposure:
- Before the March contract expires, sell the March contract.
- Simultaneously, buy the June contract for the same asset.
This extends your position into the next expiry window.
Settlement at expiry
- Cash-settled contracts: Final value is settled in cash (e.g., most index futures).
- Physically settled contracts: Delivery of underlying asset occurs if the position is not squared off.
What if...
| Scenario | Resolution |
|---|
| Attempt to retain position post-expiry | Not possible; contract settles. Rollover before expiry to maintain exposure. |
| Forget to rollover and contract expires | Position is settled based on the contract terms—either in cash or delivery. No further action can retain it. |
Last updated: 26 Jun 2025
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