What happens if futures are not liquidated on the delivery date? The answer is as follows.

Before reaching the futures delivery date, traders need to make a decision on whether to deliver the contract in kind or close the position according to the regulations of the futures exchange. So what happens if futures are not liquidated on the delivery date?

What happens if futures are not liquidated on the delivery date?

If futures investors fail to clear their positions on the delivery date, the following situations may occur:

1. The futures company will force investors to close their positions. Before the futures contract is about to expire, the futures company will notify investors by SMS or telephone, so that they can consider closing their positions as soon as possible. If not handled in time, they may carry out forced liquidation on behalf of customers.

2. Investment losses may occur. For example, if an investor holds a long futures contract and the futures market price is much lower than the purchase cost price when forced delivery or self-liquidation, then there may be a big loss after liquidation.

3. Physical delivery is required. When the futures contract expires, if investors are unwilling to close their positions, then according to the futures trading regulations, physical delivery is needed. For example, if the investor holds the seller's position at the time of delivery, physical delivery means that the investor needs to provide the buyer with the corresponding physical objects according to the quality and quantity stipulated in the futures contract. If investors do not have the corresponding physical objects, or do not make the corresponding delivery preparations, they may face the risk of default.

The futures delivery date refers to the whole process from the end of the futures contract to the liquidation of the contract according to the transfer of the product use right contained in the futures contract when the futures contract expires.