Single Stock Futures - Managing Expiration Dates

All futures contracts have expiration dates. There are three basic approaches for managing the expiration of futures contracts:

1. 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.
    
2. 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.
    

3. 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.