Why Futures Contracts Have an Expiry but Stocks Do Not

Short answer: A stock is ownership in a company that exists indefinitely, while a futures contract is a time-bound agreement to trade at a set price on a specific future date, so it must end on that date.

Stocks Represent Ownership

When you buy a share, you own a small piece of a company. The company continues to operate indefinitely, so there is no reason for your ownership to expire. You can hold the share for as long as you like, and it has no end date.

Futures Are Time-Bound Contracts

A futures contract is fundamentally different. It is an agreement between two parties to buy or sell an underlying asset at a predetermined price on a specific future date. The whole point of the contract is tied to that date, so once it arrives, the contract is settled and ceases to exist.

Why a Fixed Date Is Necessary

Both parties to a futures contract need certainty about when settlement happens, so they can fulfil their obligation, take or make delivery, or settle in cash. Without an expiry, there would be no defined moment to settle the agreed trade, and the contract would have no anchor.

Rolling Over Positions

Traders who want to keep a futures position beyond expiry do not extend the contract; they roll over by closing the expiring contract and opening one with a later expiry. This lets them maintain continuous exposure while respecting each contract's fixed end date.

Different Expiry Cycles

Exchanges list futures for several upcoming expiries, such as the near month and further months, so traders can choose their horizon. Each of these is a separate contract with its own fixed expiry date.

Practical Takeaway

Remember that holding a futures position is not like holding a stock; you must manage expiry, either by closing, rolling over, or accepting settlement. Stocks let you sit indefinitely, while futures require active attention to their built-in time limit.

This explainer was written by The Dispatch desk to answer a question readers commonly ask. It is general information, not personalised financial advice.