{
  "id": "22cb4210-4190-58bb-ad44-533190b103a3",
  "slug": "last-notice-day",
  "term": "Last Notice Day",
  "aliases": [],
  "category": "Derivatives & Options",
  "category_slug": "derivatives-options",
  "difficulty": "basic",
  "definition": "Last Notice Day is the final day on which the holder of a short futures position may issue a notice of intent to deliver the underlying commodity or financial instrument against an expiring futures contract. After this date, the short position holder can no longer initiate delivery and any open contracts will be settled according to exchange rules.",
  "key_takeaways": [
    "Last Notice Day precedes or coincides with the Last Trading Day for most futures contracts, but the exact relationship varies by exchange and contract specification.",
    "Buyers (long position holders) who have not offset their futures positions by Last Notice Day face the risk of being assigned a delivery notice.",
    "For physical-delivery contracts, being long past Last Notice Day obligates the buyer to accept and pay for the underlying physical commodity or financial instrument.",
    "Many commodity traders and hedge funds systematically roll or close long futures positions several days before Last Notice Day to avoid unwanted physical delivery.",
    "Cash-settled futures contracts do not have Last Notice Day concerns because settlement occurs via cash transfer rather than physical delivery."
  ],
  "detailed_explanation": "Futures contracts that require physical delivery operate on a structured delivery timetable governed by the exchange on which they trade. Within the delivery month, several key dates define the window during which delivery obligations can be created and fulfilled. First Notice Day is the first date on which a seller can serve a delivery notice; Last Notice Day is the final date on which such a notice can be filed. Last Trading Day, which may fall before or after Last Notice Day depending on the contract, is the final date on which the contract may be traded on the exchange floor or electronic platform.\n\nThe mechanics of delivery notice issuance follow a defined sequence. A short futures holder who intends to make delivery notifies the exchange clearinghouse, which then assigns the delivery notice to a long position holder—typically the oldest outstanding long position in the expiration month. Once assigned a notice, the long holder has a limited window to either accept the delivery (by paying the invoice price and arranging logistics) or to re-tender the notice to another long holder if the exchange's rules permit this practice.\n\nFor financial futures—such as Treasury bond futures, Eurodollar futures, or equity index futures—the delivery mechanics differ from commodity contracts. Treasury bond futures, for instance, require the short to deliver a qualifying Treasury security with a remaining maturity within specified bounds; the short chooses which bond to deliver (the 'cheapest to deliver' bond) and files the corresponding delivery notice. Equity index futures, being cash-settled, have no physical delivery and therefore no Last Notice Day.\n\nThe practical relevance of Last Notice Day for hedge funds and institutional traders is most acute in commodity markets. A fund that is long crude oil futures for speculative purposes has no desire to take delivery of tens of thousands of barrels of crude oil at a designated terminal. Accordingly, sophisticated commodity traders maintain roll calendars that specify the latest acceptable date for rolling a position from the front-month contract to the next contract. Typically, this roll occurs well before First Notice Day, let alone Last Notice Day, to avoid even the risk of receiving a delivery notice.\n\nFailure to monitor delivery dates has produced famous losses. In April 2020, the WTI crude oil front-month futures contract (May 2020) famously traded at negative prices ($-37.63/barrel) because holders of long positions were desperate to exit before First Notice Day but found no buyers, as physical storage at the Cushing, Oklahoma delivery point was nearly full.",
  "example": "A commodity trading advisor (CTA) manages a trend-following program that holds long positions in CBOT (Chicago Board of Trade) corn futures contracts expiring in December. The CTA's roll schedule specifies that all front-month positions must be rolled to the March contract by November 29th, which is approximately two weeks before First Notice Day for the December contract (typically around December 1st) and well before Last Notice Day (typically December 31st). On November 28th, the compliance system flags a remaining position of 50 contracts (250,000 bushels). The head trader rolls all 50 contracts by selling December corn and simultaneously buying March corn at a spread of −5 cents per bushel, avoiding any delivery obligation and the logistical complications of physically receiving 250,000 bushels of corn.",
  "formula": null,
  "formula_latex": null,
  "interactive_type": null,
  "calculator_id": null,
  "related_terms": [
    "automatic-exercise",
    "basis-swap",
    "bermuda-option",
    "board-of-trade",
    "bond",
    "delivery",
    "delivery-notice",
    "equity",
    "equity-index",
    "eurodollar",
    "exchange",
    "floor",
    "futures-contract",
    "ratio-spread",
    "series-of-options"
  ],
  "backlinks": [
    "charm",
    "collar",
    "delivery-notice",
    "delta",
    "performance-bond"
  ],
  "cross_references": [
    "board-of-trade",
    "bond",
    "delivery",
    "delivery-notice",
    "equity",
    "equity-index",
    "eurodollar",
    "exchange",
    "floor",
    "futures-contract",
    "treasury-bond",
    "wti-crude-oil"
  ],
  "tags": [
    "level:basic",
    "cat:derivatives-options"
  ],
  "asset_classes": [
    "derivatives"
  ],
  "regulators": [],
  "see_also": [],
  "sources": [],
  "wordcount": 730,
  "checksum": "adf5c6f8ae7a52fc",
  "version": "2026.05.03",
  "license": "CC-BY-4.0",
  "updated_at": "2026-09-07T02:15:24+00:00",
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}