What happens when an E-mini futures contract expires?
Cash Settlement
If a trader has not offset or rolled his position prior to contract expiration, the contract will expire and the trader will go to settlement. At this point, a trader with a short position will be obligated to deliver the underlying asset under the terms of the original contract.
Futures contracts need to be settled before the expiration date to avoid penalties. However, there is no penalty on not settling an options contract before the expiration. You can simply let the contract expire if you wish not to buy or sell the asset.
Similar to the expiration date, the final settlement time varies by product. For example, natural gas options on futures cease trading at 2:30 p.m. ET, when the outright futures contract settlement price is determined. However, the Monday weekly options on futures for the E-mini S&P 500 expire at 4 p.m. ET.
When traders close a futures position for a profit their account balance will increase. If the trader closes the futures position for a loss the funds are withdrawn from the traders account and their account balance will go down.
What is a futures contract? A futures contract is a legally binding agreement to buy or sell a standardized asset on a specific date or during a specific month.
Perpetual futures, also known as perpetual swaps or “perpetuals,” are a type of derivative contract that allows traders to speculate on the future price of an asset without an expiration date. Unlike traditional futures contracts, which have a set expiry date, perpetual futures can be held indefinitely.
If an options contract position is not squared off before the expiration date, the trader can lose the total premium and any taxes and brokerage charges paid. You can utilize leverage to make purchases or sales during the trading day with an intraday (MIS/CO) order (up to 5 times the money in your account).
Many exchanges do not allow it. However, you can sell a futures contract any time before the expiration date.
An e-mini is a standard futures contract that is broken down into a fractional portion of a stock index. E-mini futures are traded electronically, hence the name e-mini. E-minis are heavily traded on the Chicago Mercantile Exchange (CME) where e-minis were first introduced (on September 9, 1997).
Can futures expire worthless?
Options and Futures Nearing the Expiration Date
If the owner of the option does not exercise the option (i.e., if the option is out-of-the-money) on the date of expiration, the option expires worthless. For futures contracts, they must be closed on or before the date of their expiration.
| Last | Date/Time | |
|---|---|---|
| E-Mini S&P 500 Future Dec 2025 | $5,365.75 | Apr 22, 2024 4:07 p.m. |
| E-Mini S&P 500 Future Mar 2026 | $5,414.75 | Apr 22, 2024 4:07 p.m. |
| E-Mini S&P 500 Future Jun 2026 | $5,452.75 | Apr 22, 2024 4:07 p.m. |
| E-Mini S&P 500 Future Sep 2026 | $5,497.75 | Apr 22, 2024 4:07 p.m. |
Yes, it is possible to lose more money than you initially invested in futures trading. This is because futures contracts are leveraged, which means you can control a large position with a relatively small amount of investment upfront. 9 While leverage can amplify your gains, it can also magnify your losses.
That means if you are long on futures, you have to sell it off and if you are short on futures you need to buy it back. The other option is that you just leave the futures contract to expire on the last day and any profit or loss is adjusted to your trading account based on the closing price of the underlying asset.
Unlike stocks, you can sell futures without making a previous purchase. However, you cannot realize a profit in futures trading until you “flatten” your position – placing an order for the same quantity on the opposite side of the market.
Settlement type: Futures contracts can be settled through physical delivery of the underlying asset or cash settlement. For crude oil futures like “CLZ24,” physical delivery is more standard, though many participants close their positions before the delivery date to avoid actual delivery.
These contracts are often described as “perpetual” or “indefinite” contracts. At common law, a term may be implied into a perpetual contract which allows a party to terminate by giving “reasonable notice”.
Going long in a future means the holder of the position is obliged to buy the underlying instrument at the contract price at expiry. The holder of the position will profit if the price of the underlying instrument goes up, as the price he will pay will be less than the market price.
This square-off process entails the broker closing your futures open position for several reasons. For example, the broker may forcibly square off the position if you have paid concessional margins for intraday closure.
Eventually, the time value in case of all the 3 options will eventually tend towards zero as expiry approaches. While the OTM option and the ATM option itself will have a zero value, in case of ITM options the option premium will still be positive due to the existence of intrinsic value.
Can I trade futures with $100?
This can be a risky form of trading, but it also has the potential to generate large profits. If you are starting with a small amount of capital, such as $10 to $100, it is still possible to make money on futures trading.
For instance, micro contracts on foreign-exchange futures can carry margins of as little as $200 to $400. If your margin falls below the minimums required, then you'll have a limited amount of time to make up the difference in additional deposits.
Trading futures for a living is a compelling idea — but to do it successfully, you'll need sufficient startup capital and a well-designed trading plan. You'll also need a trading platform that offers fast, reliable access and the right technological tools.
The contract size of an E-mini is the value of the contract based on the price of the futures contract times a contract-specific multiplier. The E-mini S&P 500 has a contract size of $50 times the value of the S&P 500. 2 So, if the S&P 500 is trading at 2,580, the value of the contract would be $129,000 ($50 x 2,580).
| Barchart Symbol | ES |
|---|---|
| Exchange Symbol | ES |
| Contract | E-Mini S&P 500 Index |
| Exchange | CME |
| Tick Size | 0.25 points ($12.50 per contract) |
