Contract Expirations and Rollovers
Futures contracts have specific expiration dates. After that date, the contract is no longer valid for trading. Each market has a unique expiration sequence throughout the year, which often extends into the next year. To maintain open positions, traders must roll over to the next contract month before the current one expires.
Futures contracts are agreements to buy or sell an asset at a future date for a predetermined price. This concept originated in commodities markets, where physical goods like grain or oil were bought and sold in advance.
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The expiration date is the final day a contract can be bought or sold for a given expiry.
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The settlement date is when the contract is finalized, either through physical delivery or cash settlement, depending on the terms of the contract.
Even in modern electronic trading, the expiration date plays a key role. It defines the end of the contract lifecycle and triggers either a rollover, position closure, or settlement.
Rolling over a futures contract means closing your position in the current, soon-to-expire contract and opening a new position in the next contract month. This is done manually by the trader, typically near the contract's expiration date.
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Manual Rollover: Close position in the current contract, then open a position of the same size in the next active month.
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Timing: Many traders roll several days before expiry to avoid reduced liquidity or wider spreads.
Some futures markets, such as equity index futures, have predictable schedules: E-mini and Micro E-mini index contracts typically expire on the third Friday of every third month (March, June, September, and December).
Note: Kraken Derivatives US does not currently support automatic or manual rollover features. If a position remains open through expiry, it will simply settle and close. If you want to rollover your contract, you must close and re-open in the next period.
If a contract is held through expiration, it is automatically settled by the exchange and the trader’s account is either credited or debited depending on the final settlement price. No further action is required by the trader.
On Kraken Derivatives US, all supported futures contracts are cash settled. That means your position will close automatically and the realized PnL will be reflected in your balance as a debit or credit. There is no delivery of physical assets.
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Cash Settled Futures: These are the only types of contracts supported on Kraken Derivatives US. At expiration, open positions are settled in cash and the trader's account is adjusted accordingly.
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Physically Delivered Futures: These contracts involve the transfer of the actual underlying asset at expiration (e.g., barrels of oil, ounces of gold). These are used primarily by hedgers and are not supported on Kraken Derivatives US.
Kraken Derivatives US accounts are intended solely for speculative trading. Clients are not permitted to take delivery of any physical commodities.
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Expiration Dates: Each futures contract has a predetermined expiration date. It's crucial to be aware of these dates to avoid holding expired contracts. Every futures contract is identified by a product symbol along with an expiration month and year that can help identify if it is the current contract and when it expires.
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Symbol Reference: Each contract symbol includes the month and year of expiry. For example, "BTCN25" refers to the Bitcoin futures contract that expires in July 2025. Expiration dates and rollover timelines vary depending on the product, so it's important to understand your specific contract’s schedule.
The following alphabetic letters will correlate with the following months:
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January - F
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February - G
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March - H
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April - J
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May - K
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June - M
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July - N
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August - Q
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September - U
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October - V
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November - X
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December - Z
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Rollover Frequency: Some futures contracts expire every month while others, like stock index futures, expire every 2-3 months. The "front month" contract is the contract nearest to its expiration date and is usually the contract actively being traded by most traders.
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Trading Interface Behavior: Once a contract has expired, it will no longer be available for trading or charting. Positions will settle automatically.
Best Practices:
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Monitor Expirations: Use Kraken's contract specifications page to keep track of key dates.
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Plan Ahead: Consider rolling several days ahead of expiry to avoid wide spreads and thin liquidity.
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Stay Informed: Review the Margins page and contract specs for the instruments you trade. This will help ensure you're aware of all terms, fees, and trading windows.
Brokerage services are provided by NinjaTrader Clearing, LLC doing business as Kraken Derivatives US, a Futures Commission Merchant registered with the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA ID #0309379).