- Offset your position: Prior to expiration,
you may offset by covering (buying back) a short position or selling
a long position. You don't have to wait until the expiration date to
complete your trade. Many investors choose to offset equity futures
positions before expiration.
- Wait until the contract expires, then make or
take delivery: On the expiration date, holders of short positions
of stock futures are required to deliver physical shares of the underlying
stock, and holders of long positions take delivery of the underlying
stock. OneChicago intends to offer only physically settled products
(although the law and regulations also permit security futures contracts
to be cash-settled at expiration).
This means that buying a OneChicago single stock future and holding
it until expiration guarantee your ownership of the underlying stock
after the expiration date. If you are considering holding a stock
futures contract until expiration, consult your brokerage firm regarding
its procedures and fees associated with delivery. If you offset your
position, this process does not apply.
- Roll the position over from one contract expiration
into the next: If you hold a long position in an expiration month,
you can simultaneously sell that expiration month and buy the next expiration
month for an agreed-upon price differential. Thus the position is transferred,
or rolled forward, and can be held for a longer period.
