SolitudeSeeker
Sat May 18 2024
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7 answers
1396
Can futures contracts expire?
Ah, you've hit upon an intriguing question indeed. You know, futures contracts, they're not just pieces of paper with promises written on them. They're actually agreements, contracts, between two parties to buy or sell an asset at a specified price on a designated future date. And, yes, these contracts do have an expiration date. Think of it like a ticket to a concert or an event. You can't use it after the event has ended, can you? Similarly, a futures contract ceases to exist once its expiration date has passed. It's no longer valid. But why does it expire? It's all about risk management and market efficiency. If futures contracts didn't expire, the market would become overcrowded with old, stale contracts, making it difficult for traders to find counterparties and execute trades efficiently. So, to answer your question: yes, futures contracts can and do expire. It's a natural part of their lifecycle and helps maintain the health and liquidity of the futures market.
Bianca
Sat May 18 2024
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7 answers
1592
What happens if you let a futures contract expire?
Could you explain to me what exactly happens when a futures contract reaches its expiration date? I've been hearing a lot about futures trading but still have some fundamental questions. Do the parties involved in the contract have to take any specific actions? Is there a financial impact? Or does the contract simply terminate without any further consequences? I'm particularly interested in understanding the mechanics behind it and how it affects the overall cryptocurrency and finance landscape. Could you elaborate on this, please?
