Futures Expiration and Rollover

Written by Greg, founder of FTMarketWatch — a former licensed commodities trader.

Last reviewed: September 2, 2026

Unlike a stock, a futures contract has an expiration cycle. Traders who want to maintain exposure beyond the current contract often close the expiring position and open a later-dated contract. That process is called a rollover.

What happens as a futures contract expires?

The outcome depends on the contract. Some contracts are cash-settled. Others can involve physical delivery. The exchange publishes the last trading day, settlement method and delivery rules.

What does it mean to roll a futures position?

A roll normally consists of two linked trades: close the position in the near contract and open a similar position in a later month. The two contracts may trade at different prices, so rolling is not economically identical to simply extending the original contract.

Contango and backwardation

If later contracts trade above nearer contracts, the curve is commonly described as contango. If later contracts trade below nearer contracts, it is commonly called backwardation. The shape of the curve can affect repeated roll returns.

A practical rule

Never assume a contract can be held indefinitely. Check its expiration, settlement and delivery calendar before entering the trade.