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| Last Trading Day |
Typically associated with a futures contract, it is the last day a trader can liquidate his/ her position in a contract or take possession of the commodity. For example, if a bread company enters into a futures contract, in wheat with a December expiration date, the contract will expire on the third Friday of December.
At that time, the bread company must either cancel the contract, by taking an offsetting position, or agree to take possession of the quantity of wheat in this contract.
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Given that most futures and options contracts expire on the third Friday of the expiration month, these extremely busy days are known as triple-witching days on Wall Street. After this date, trading of this particular contract stops; however, trading in other contracts continues until their expiration date.
