The whole process of futures trading can be summarized as opening positions, holding positions, closing positions or physical delivery. Buying and selling a futures contract in the futures market is equivalent to signing a forward delivery contract. If traders keep futures contracts until the end of the last trading day, they must settle futures transactions by physical delivery or cash settlement. However, only a few people make physical delivery, and most speculators and hedgers generally choose to sell their futures contracts or buy back their futures contracts before the end of the last trading day.
The content of this article comes from People's Republic of China (PRC) Financial Code: Application Edition by China Law Publishing House.