what is the last trading day 
the last trading day is the final day that a futures contract or other derivatives with an expiry date may trade or be closed out before the delivery of the underlying asset or cash settlement must occur at the end of the last trading day the contract holder must be prepared to accept delivery of the commodity or settle in cash if the position is not closed the same concept applies to options contracts the last trading day is the final chance to close the position otherwise the underlying will be delivered if applicable if the option is worthless then it does not need to be closed it will simply expire understanding the last trading daythe last trading day is the day before a derivative expires on the expiry date the derivative is no longer tradable and the settlement process begins assume the expiration date on an options contract is friday march 22 the last trading is thursday march 21 the last trading day is the final day that a futures contract can be traded or closed out 1 any contracts outstanding at the end of the last day trading day must be settled by delivery of the underlying physical asset exchange of financial instruments or by agreeing to a monetary settlement the specific agreements covering these potential outcomes are contained in the futures contract specifications and vary between securities in general most futures contracts result in an exchange of financial instruments or a cash settlement rather than a delivery of the physical commodity since most market participants are hedging or speculating the last trading day for an option is the day before the expiration date 4 holders of options on the expiry date will be required to deliver or receive the underlying if applicable options that are worthless will expire and don t need to be closed out if an option buyer is holding a position that is in the money itm they will receive shares and be required to put the capital and or margin to purchase short those shares the option seller will need to provide those shares for some derivative contracts trading is allowed on the expiry date up to a certain time of day in this case the last trading day is the expiry day 4last trading day informationtraders can find expiry dates in their derivative contract or by looking at various exchange websites for standard trade settlement details exchanges will have a web page that lists all of their futures and options contracts and their settlement dates and times some popular futures and options exchanges in north america include the last trading day is important for investors to note as it allows them to close out of the contract before expiration futures contracts also have several notice days which provide the investor with details on the approaching settlement notice days can vary by contract with the first notice day often three to five days before the last trading day if an investor s contract position is not closed before the last trading day then they will be expected to proceed with delivery subsequently they will receive delivery notices and be required to arrange for the final delivery of the underlying assets example of the last trading day in a futures contractsuppose that a speculative futures trader purchases a gold futures contract with an expiration date of aug 27 2021 which has a last trading day of aug 26 2021 if the trader doesn t sell the contract by the end of the day on aug 26 the contract must be settled by delivery of the underlying asset most contracts also include a cash settlement option that relieves the two parties from the physical exchange or delivery of the underlying assets on the other hand suppose a food production company purchases orange juice futures contracts with an expiry date of july 13 2021 they may choose to take physical delivery of the orange juice since they can package it and sell it to customers or stores after expiration the production company would receive a delivery notice and be required to make arrangements for receipt of the orange juice if they did not want to take physical delivery then they would need to close the position on the last trading day which in this case is july 12 2021 