Capital Market: Basic Terms

Capital Market: Basic Terms

What is an Expiration Date (Derivatives)

An expiration date in derivatives is the last day that a derivative, such as options or futures, is valid. On or before this day, investors will have already decided what to do with their expiring position. Before an option expires, its owners can choose to exercise the option, close the position to realize their profit or loss, or let the contract expire worthless.

What is a Delivery Date

A delivery date is the final date by which the underlying commodity for a futures or forward contract must be delivered for the terms of the contract to be fulfilled.

What is Maturity Date

The maturity date is the date on which the principal amount of a note, draft, acceptance bond or another debt instrument becomes due and is repaid to the investor and interest payments stop. It is also the termination or due date on which an installment loan must be paid in full.

What is Settlement Date

The settlement date is the date when a trade is final, and the buyer must make payment. It is also the payment date of benefits from a life insurance policy. The settlement date for stocks and bonds is usually two business days after the execution date. For government securities and options, it's the next business day. In spot foreign exchange (FX), the date is two business days after the transaction date.

What is Execution Date

"Execution Date" means the date on which this Agreement has been executed by all the parties 

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