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If a company is buying a future with an obligation to receive, say, 125,000 euros in 3 months time (in return for US $), and the end of the contract happens to coincide exactly with the date they want the euros, can they just let the contract crystallise and receive the euros from the counterparty? Or must they always just settle the gain/loss and apply that against having to go to the cash market to buy the euros there? With an option you can exercise a right to buy and receive delivery of the underlying, I’m just not sure if you can do the same with a future? Thanks.
If the future is not sold before the last day of the future, then yes – it does crystallise and the contract must be fulfilled (unlike options where there is a choice as to whether or not to exercise them, with futures the contract must be fulfilled if it has not previously been sold).
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