You can hold a futures contract from the day it is listed until its last trading day, and depending on the product that window runs from a few weeks to more than a decade. The E-mini S&P 500 December 2026 contract first traded in September 2021, giving it roughly a five-year lifespan. WTI crude oil futures list monthly contracts covering the current year plus the next ten calendar years, so a single contract can theoretically sit in your account for over ten years. In practice almost no retail trader gets anywhere near those outer edges. Margin calls, brokerage close-out policies, and the approach of physical delivery usually force you out first.
Every Contract Has an Expiration Baked In
The exchange fixes an expiration date when it lists the contract, and that date never moves except for holiday adjustments. CME Group identifies each contract month with a single letter: F for January, G for February, H for March, through Z for December. A ticker like ESZ26 is an E-mini S&P 500 expiring in December 2026, so the end of your potential holding period is visible on every quote screen.
How far out those expirations stretch depends on the underlying asset. Equity index futures follow a quarterly cycle (March, June, September, December), and the CME lists several years of them at once, which is why a December 2028 contract already trades today. Commodities tend to run on a monthly cycle. WTI crude has a separate contract for every calendar month more than a decade into the future, which gives hedgers and long-horizon speculators real flexibility in choosing a time frame.
When an exchange holiday falls on a scheduled expiration, the last trading day shifts. Friday expirations generally move to the preceding Thursday; other weekday expirations are simply not listed for that date. If you plan to hold near expiration, check the calendar for your specific contract.
What Actually Forces You Out Before Expiration
The exchange’s dates are the outer wall. For most traders, the real deadline is set by their broker and by two exchange milestones that come before the last trading day: First Notice Day and the Last Trading Day itself.
First Notice Day is when the clearinghouse begins notifying holders of long positions in physically delivered contracts that they may be required to take delivery. Once this date passes, you are no longer holding a purely financial position. You are potentially on the hook for receiving barrels of oil, bushels of wheat, or whatever the contract specifies. The clearinghouse assigns delivery obligations by priority, matching the oldest long positions first and using proration and random selection to break ties.
The Last Trading Day is the final session in which you can close through an offsetting trade on the exchange. After it passes, any open position goes to settlement, either by physical delivery or cash payment depending on the contract.
Most retail brokers will not let you reach either milestone on a physically delivered contract. Firms like Interactive Brokers publish specific close-out deadlines for each physically delivered product, often days or weeks before the exchange’s dates, and positions still open past those deadlines face automatic liquidation plus additional fees. If you want to carry a contract into its final weeks, pull your broker’s close-out schedule before you plan the trade.
The nature of the contract changes what’s at stake. Physical delivery means the seller hands over the actual commodity. A single WTI contract represents 1,000 barrels delivered free-on-board at pipeline or storage facilities in Cushing, Oklahoma, and the buyer pays the full contract value and takes responsibility for storage or transport. Cash-settled contracts, like the E-mini S&P 500, skip the logistics entirely: the exchange calculates the difference between your entry price and the final settlement price and credits or debits your account. Cash-settled products are far more practical for anyone who wants to hold close to expiration.
Margin Calls Can End It Any Day
Expiration sets the ceiling. Margin sets the floor. Fall below the maintenance level and your broker can close your position the same day, no matter how many months remain on the contract.
When you open a futures position, you post initial margin, which the exchange treats as a performance bond rather than a down payment. You then have to keep enough equity in the account to meet a lower threshold called maintenance margin. At CME Group, for accounts without a heightened risk profile, initial margin equals 100% of maintenance margin; for heightened-risk accounts, initial margin is set at 110% of maintenance.
If adverse price action pushes your equity below maintenance margin, your broker issues a margin call demanding you bring the account back up to the initial margin level. The timeline is unforgiving. There is no guaranteed grace period. In volatile markets, forced liquidation can begin immediately. In calmer conditions you typically have until the next business day at most, and your broker has the right to liquidate without further notice if the call is not met. A sharp intraday move can end a trade in hours regardless of how far away the contract expires, so holding futures over long periods really means carrying a cash cushion well above the minimum.
Position Limits Tighten as Expiration Nears
Federal rules also cap how large a position you can carry, and the caps shrink as delivery approaches. The CFTC sets speculative position limits on key commodities including corn, wheat, soybeans, soybean oil, soybean meal, oats, and cotton. For commodities not on that list, exchanges set their own limits under authority delegated by the CFTC.
During the spot month, which begins just before delivery notices can be issued, the maximum number of contracts you can hold drops in a series of step-downs. For some physically delivered contracts, the federal limits ratchet from 600 contracts after the first Friday of the contract month, down to 300 contracts before the last five trading days, and finally to 200 contracts before the last two trading days. The point is to prevent any single trader from cornering the deliverable supply.
Commercial hedgers can apply for an exemption if the position qualifies as bona fide hedging, meaning it is economically appropriate for reducing price risk in a commercial enterprise and substitutes for a transaction in the physical market. CFTC approval is generally required before the position exceeds the limit, with a five-business-day grace period available when a sudden or unforeseen hedging need arises. Large positions also trigger ongoing reporting under the CFTC’s Large Trader Reporting Program once they cross commodity-specific thresholds published by the agency.
Rolling to Hold Longer Than One Contract
Because every individual contract expires, continuous exposure requires rolling. Rolling means closing your expiring contract and simultaneously opening a new one in a later month. A trader who wants to stay long crude oil for two years will roll from one monthly contract to the next, twelve times a year.
The cleanest execution is a calendar spread, which packages the sale of the near-month and the purchase of the deferred month into a single transaction. You cross only one bid-ask spread instead of two. In CME Treasury futures, for example, calendar spreads can reduce the cost of crossing the bid-ask spread by as much as 75% compared with executing each leg separately. Calendar spreads also tend to have deep liquidity, so large rolls move the market less.
The bigger cost of rolling is not commissions but the price gap between the two contracts, and that gap depends on the shape of the futures curve. In contango, later-dated contracts trade at a premium to nearer ones, which is the normal state for many commodities because carrying inventory forward involves storage, insurance, and the interest on tied-up capital. Rolling a long position in contango means selling the cheaper near-month and buying the more expensive deferred month. That difference, called negative roll yield, eats into returns over time even if the spot price never moves.
Backwardation is the reverse: near-term contracts trade at a premium to deferred ones, often because of tight current supply or strong immediate demand. Rolling a long position in backwardation produces positive roll yield because you sell high and buy low. As any contract approaches expiration, its price converges with the spot price, which is the mechanism through which contango’s premium or backwardation’s discount actually gets realized. In a persistently contango market, roll costs can quietly consume a substantial share of a long-term position’s returns.
Holding Period Matters Less for Taxes Than You Might Think
With stocks, how long you hold drives whether a gain is short-term or long-term. Futures work differently. Most exchange-traded futures are classified as Section 1256 contracts under the Internal Revenue Code, a category that includes regulated futures contracts, foreign currency contracts, and nonequity options. Gains and losses on Section 1256 contracts are automatically split 60% long-term and 40% short-term regardless of how long you held the position. Close a trade after three days and you still get the 60/40 treatment.
Section 1256 contracts also follow mark-to-market rules. Any contract you still hold on December 31 is treated as though you sold it at fair market value on that date, so an open position at year-end generates reportable gain or loss even though you never closed it.
One practical point for anyone who rolls: the wash sale rule does not apply to Section 1256 contracts. Close a losing futures position and immediately open a new one in the next contract month, and the loss is still deductible in the current year. Securities futures contracts (single-stock futures) are specifically excluded from Section 1256 treatment and do remain subject to wash sale rules.