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Last Trading Day

Final calendar day on which a futures or swap contract may be traded before expiry, settlement, or delivery procedures apply.

The last trading day is the final calendar day on which a futures, options, or swap contract may be actively traded before it expires or enters its settlement phase. After this date, market participants can no longer open or close positions through normal trading mechanisms, and contractual settlement rules take over. In oil markets, the last trading day is particularly critical due to the possibility of physical delivery obligations.

For physically settled crude oil futures, such as WTI on NYMEX, positions remaining open after the last trading day may result in the obligation to make or take delivery at a specified location. This creates strong incentives for financial traders to exit positions well before expiry, often concentrating liquidity in earlier contract months.

In cash-settled contracts, the last trading day determines the final price observation window used to calculate settlement values. Traders must be aware of exchange calendars, holiday adjustments, and contract-specific rules, as misjudging the last trading day can result in unintended exposure, forced liquidation, or operational risk.

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