Last Trading Day is the final day on which a futures or options contract can be traded before expiration. After this date, the contract enters its delivery or settlement period, and no further trading is allowed. This date is predetermined by the exchange and varies by contract type, with most commodity futures having last trading days several days before the delivery month begins.

Understanding Last Trading Day is crucial for position management, as traders must either close positions or prepare for delivery obligations before this deadline. Volume often increases leading up to the Last Trading Day as participants close positions, while open interest typically declines. Missing this deadline can result in unwanted delivery obligations or automatic cash settlement.

Real-world example: July crude oil futures have a Last Trading Day of June 20th, requiring traders to close positions by that date or face physical delivery obligations of 1,000 barrels per contract at Cushing, Oklahoma.