First notice day - How To Discuss

First notice day,

Definition of First notice day:

1. In futures trading, the first day of a delivery month on which notices can be issued by the sellers to the clearing house and by the clearing house to the buyers indicating that the sellers intend to deliver (the financial instruments or physical commodities) in fulfillment of their futures contracts.

2. If the first business day of the delivery month was Monday, Oct. 1, first notice day would typically fall one to three business days prior, so it could be Wednesday, Sept. 26, Thursday, Sept.27, or Friday, Sept. 28. Most investors close out their positions before first notice day because they don't want to own physical commodities. According to Futures Magazine, less than 1% of futures contracts actually go to physical delivery.

3. A First Notice Day (FND) is the day after which an investor who has purchased a futures contract may be required to take physical delivery of the contract's underlying commodity. The first notice day can vary by contract and will also depends on exchange rules.

How to use First notice day in a sentence?

1. In practice, most derivatives traders close out or roll over their expiring positions to avoid the prospect of physical delivery.
2. First notice day (FND) is a date specified in a futures contract after which time the owner of the contract can take physical delivery of the underlying asset.
3. The first notice day and its specifications will be spelled out by the futures contract details.