Futures contracts are time-sensitive by design. Every contract comes with an expiration date, which defines when the agreement to buy or sell the underlying asset must be fulfilled. For active traders, this means understanding how expiration works—and how to roll contracts forward—is essential to managing open positions without disruption.
In this post, we’ll explain what contract expiration is, how rollover works, and what you need to do to avoid unnecessary losses or confusion when trading futures.
Table of Contents
- What Is a Futures Contract Expiration?
- What Happens When a Contract Expires?
- What Is a Rollover in Futures Trading?
- Why Rollover Matters to Traders
- How to Roll Over a Futures Position
- When to Roll a Futures Contract
- Tips for Smooth Rollovers
- Final Thoughts
1. What Is a Futures Contract Expiration?
Each futures contract has a set expiration date. This is the final day that trading can occur for that contract. After that, it either:
- Settles in cash (for most index futures), or
- Requires physical delivery (for some commodities)
Most traders don’t hold until expiration. Instead, they exit or roll their position forward before the deadline.
2. What Happens When a Contract Expires?
If you’re still holding a contract at expiration:
- You may be forced to accept delivery or make delivery (depending on the contract)
- Your position will be automatically closed by your broker (in most retail accounts)
- You could be exposed to last-minute volatility known as “expiration risk”
Avoiding expiration risk is why active traders almost always exit or roll their positions ahead of time.
3. What Is a Rollover in Futures Trading?
A rollover is the process of closing a position in a contract that is nearing expiration and opening a new position in the next active contract month.
For example: If you’re long the E-mini S&P 500 September contract (ESU24), you’d sell that contract and buy the December contract (ESZ24) before September expires.
4. Why Rollover Matters to Traders
If you don’t roll over your contract:
- You could get auto-liquidated or delivered physical commodities you don’t want
- Your chart may stop moving (low volume near expiration)
- Your margin requirements could spike unexpectedly
Rolling over ensures:
- Continuity in your position
- Access to the most liquid contracts
- Cleaner technical charts
5. How to Roll Over a Futures Position
Rolling over is simple:
- Check the expiration date of your current contract
- Identify the next front-month contract (most liquid contract with highest volume)
- Exit your current contract (close the position)
- Enter the new contract with the same direction and size
Your trading platform may allow you to do this as one combined “roll” order, or you may need to place two separate trades.
6. When to Roll a Futures Contract
Most traders roll:
- 3 to 7 days before expiration
- When volume and open interest shift to the next contract
Platforms like TradingView and Orion offer continuous contracts (like “ES1!”) that auto-roll charts to help with technical analysis.
7. Tips for Smooth Rollovers
- Monitor economic calendars for expiration dates
- Check volume daily to spot when traders shift contracts
- Use limit orders to avoid slippage during low-volume periods
- Adjust technical indicators if switching charts
8. Final Thoughts
Understanding contract expiration and rollovers is crucial for any futures trader. Managing them properly avoids unnecessary risk and keeps your strategies running smoothly.
At Pilot Traders, we help you master every detail of the futures market—from contracts and rollovers to high-level execution strategies. Trade like a pro, with full confidence.
