Futures and Future Options Physical Delivery Liquidation Rules

For futures contracts that are settled by actual physical delivery of the underlying commodity (physical delivery futures), customers may not make or receive delivery of the underlying commodity. Certain currency futures are excepted from this rule (see the table below).

To avoid deliveries in expiring futures contracts, customers must roll forward or close out positions prior to a Close-Out Deadline. The standard Close-Out Deadline for holders of long positions is the end of the second (2nd) business day prior to the exchange specified First Notice Day. For holders of short positions, the standard Close-Out Deadline is the end of trading on the second (2nd) business day prior to the exchange-specified last trade day. Certain contracts use a different time ahead of the Close-Out deadline as specified in the following table.

It is the customers' responsibilities to make themselves aware of the Close-out Deadline. If a customer has not closed out a position in a physical delivery futures contract by the Close-Out Deadline, IB may, without additional prior notification, liquidate the customer’s position in the expiring futures contract. Please note that liquidations will not otherwise impact working orders; customers must ensure that open orders to close positions are adjusted for the actual real-time position.

Important Notes:
  1. With respect to certain commodities and options, it is the industry standard to refer to the expiration month of such commodities as the month following the actual Expiration or Delivery Date for that product. The TWS may not show the correct expiration or notice date information. For specifics on IB’s handling please click here. QM (Oil); QG (Gas); most government US and German bond future options are examples of atypical dating.
  2. The standard commission will be charged for the exercise or assignment of any Future Option Contract.

 

Summary of Physical Delivery Futures Policies
Contract Delivery Permitted Close-Out Deadline
ZB, ZN, ZF (ECBOT) No 2 hours before the end of open outcry trading on the business day prior to First Notice Day (longs) or Last Trading Day (shorts)
ZT (ECBOT) futures, Japanese Govt Bond Futures (JGB) No End of second business day prior to the First Position Day (longs) or Last Trading Day (shorts)
EUREXUS futures No End of business day prior to the First Position Day (longs) or Last Trading Day (shorts)
EUREXUS 2 yr Jumbo bond (FTN2) and 3 yr bond (FTN3) futures
 No End of the second business day prior to the First Position Day (longs) or Last Trading Day (shorts)
IPE contracts (GAS, NGS) No End of the second business day prior to the First Position Day (longs) or day prior to Last Trading Day (shorts)
GLOBEX LIVE CATTLE (LE) No End of the second business day prior to the First Intent Day (longs) or Last Trading Day (shorts)
GLOBEX NOK, SEK, PLZ, CZK, ILS, KRW and HUF, and correspondent Euro rates No End of the fifth business day prior to the Last Trading Day for both longs and shorts
GBL, GBM, GBS (Eurex), CONF (SOFFEX) No 2 hours before the end of trading on the last trading day
GLOBEX currency futures (EUR, GBP, CHF, AUD, CAD, JPY, HKD) Yes* Not applicable*
GLOBEX Ethanol futures (ET) No End of the fifth business day prior to the First Position Day (longs) or Last Trading Day (shorts)
All other contracts No End of the second business day prior to the First Position Day (longs) or Last Trading Day (shorts)

*As Cash and IRA accounts are restricted from holding foreign currencies, the liquidation schedule outlined above for All other contracts will also apply to Cash and IRA accounts for these foreign currency products.

Click here to learn more about Special Labeling and Expiration Date Descriptions for futures contracts.

Summary of Physical Delivery Future Options Policies
Contract Delivery Permitted Close-Out Deadline
OZB, OZN, OZF, OZT (ECBOT)                                                No 4 hours before the end of open outcry trading on the business day prior to First Notice Day (longs) or Last Trading Day (shorts)
All other contracts Yes Options will be allowed to expire into futures (or, if out-of-the-money, expire worthless), if the options expiration date is prior to the underlying futures’ First Position Day. If there is a resulting futures position, it will then be subject to the respective Close-Out Deadlines, as detailed above.