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Knowing the **expiry dates of WTI crude oil futures** can make or break your trading strategy. It influences everything from position management to risk mitigation. So, how can you use this information to your advantage? Let's explore some key strategies. Understanding expiry dates helps you manage your positions more effectively. As the expiry date approaches, the contract's price often converges with the spot price of the underlying asset. This is because the contract's value is derived from the expected price of oil at the expiry date. Traders often close their positions before the expiry date to avoid the potential complications of physical delivery. Knowing the expiry dates also helps you manage risk. As expiry approaches, lee aronsohn liquidity in the contract may decrease, meaning it might be harder to find a counterparty to offset your position. This can lead to increased volatility and wider bid-ask spreads, potentially increasing your trading costs and risk. Therefore, it's generally advisable to close your position well before the expiry date to avoid these problems. Also, you can use the knowledge of the expiry date to formulate a well-thought-out trading strategy. For example, you can choose to trade contracts with an expiry date that aligns with your trading horizon. A short-term trader might focus on near-term contracts. A long-term investor might focus on contracts further out in the future. So, your expiry date selection is a strategic decision!
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