☠️ The Silent Account Killer
- First Notice Day (FND) is when delivery notices can be issued
- Your broker will FORCE CLOSE your position without asking
- You lose control of timing and price
- Most retail traders don't know this date exists
- This article might save your account — read carefully
What Is First Notice Day?
Futures contracts aren't just financial instruments. Many are legally binding agreements to deliver physical goods.
First Notice Day (FND) is the first day that the seller can notify the buyer that they intend to deliver the actual commodity.
Think about that. If you're long crude oil futures past FND, someone can say:
"Hey, your 1,000 barrels of oil are ready for pickup at Cushing, Oklahoma. Send a truck."
— The Universe, Reminding You This Is Real
Most retail traders can't take delivery. They don't have:
- A warehouse to store 1,000 barrels of oil
- The logistics to transport gold bars
- The facilities to handle 5,000 bushels of corn
- A clue what they've gotten themselves into
So brokers protect themselves — and you — by force-closing positions before FND. But they do it on THEIR terms, not yours.
The Broker's Nuclear Option
Here's what your broker agreement says (the part you didn't read):
Typical Broker Policy (Paraphrased)
"If you hold a deliverable futures position into the First Notice Day period and do not have an approved delivery account, we reserve the right to liquidate your position at any time, at market price, without prior notice."
Translation:
- We will close your trade when WE want
- At whatever price is available AT THAT MOMENT
- You can't complain about slippage
- You signed a contract saying we could do this
- Don't call customer service crying — we warned you
This isn't theoretical. This happens every month.
The FND Nightmare Scenario
Let's walk through how FND destroys a real trading account:
Monday: The Setup
Rahul is long 2 lots of MCX Gold. He's up ₹25,000 on the trade. He's waiting for ₹80,000 target.
Tuesday: The Warning (Missed)
Broker sends email: "Positions in expiring gold contract will be squared off by Thursday." Rahul is busy at work. Doesn't check email.
Wednesday: The Dip
Gold drops 0.8% on dollar strength. Rahul is now up only ₹8,000. He thinks: "I'll wait for recovery."
Thursday 9:15 AM: The Execution
Broker's system auto-liquidates Rahul's position. Gold happens to be at session low (bid-ask wide). Slippage is brutal.
Thursday 9:16 AM: The Damage
Rahul's +₹25,000 trade closed at -₹12,000. A ₹37,000 swing because of a calendar date he didn't know.
Thursday 11:00 AM: The Insult
Gold recovers. Would have been +₹40,000 if he'd rolled to the next month on Monday.
Rahul wasn't wrong about gold. He was wrong about the calendar.
FND Dates You MUST Know
First Notice Day varies by contract. Here are the major ones:
Note: Your broker's cutoff is usually EARLIER than the exchange's FND. They add their own buffer. Check your broker's specific policy.
The MCX India Reality
For Indian traders on MCX, the game is slightly different but equally dangerous:
Expiry Day = Danger Day
MCX contracts often have physical delivery options. Your broker will force-close 1-3 days before expiry if you're not delivery-enabled.
Margin Spikes
In the last week, MCX increases margins significantly. If you can't meet the new margin, you get liquidated.
Delivery Intent
To take delivery, you need to submit intent 4-5 days before expiry. No intent = no delivery = forced closure.
Random Allocation
Delivery obligations can be randomly assigned. You might get stuck with delivery even if you didn't want it.
MCX Specific Dates
Gold: Expiry on 5th of contract month. Broker closes by 2nd-3rd.
Silver: Expiry on last day of month. Broker closes 2-3 days early.
Crude: Expiry around 19th-20th. Broker closes 2-3 days early.
Natural Gas: Last day of month. Broker closes 2-3 days early.
Action: Always check your specific broker's policy — it varies!
The Real Delivery Horror Stories
Think it can't happen? Here are real stories from the trenches:
Story 1: The Accidental Oil Baron
Year: 2019
Trader: Retail trader in US, trading crude futures
What Happened: Forgot about FND. Broker tried to contact him but couldn't.
Result: Exchange assigned him delivery. He received notice to take possession of 1,000 barrels of oil at Cushing, Oklahoma.
Cost: Storage fees, logistics fees, and penalties totaled $45,000 to get out of the situation.
Story 2: The Reluctant Gold Owner
Year: 2020
Trader: MCX trader, long gold futures
What Happened: Didn't realize his broker required delivery intent 5 days early
Result: Position force-closed at worst time of day. Gap down plus slippage = ₹75,000 loss on what was a winning trade.
Lesson: Read your broker's expiry policy document. It exists.
Story 3: The Coffee Surprise
Year: 2021
Trader: Prop trader at small firm
What Happened: Held coffee futures past FND, expecting cash settlement
Result: Coffee is PHYSICAL delivery only. Exchange assigned him 37,500 lbs of coffee. In a warehouse. In Miami.
Resolution: Frantic scrambling to find a buyer. Sold at 15% below market. Total loss: $28,000.
Other Days Futures Traders Fear
FND isn't the only dangerous date. Here's the full calendar of fear:
The FND Survival Protocol
How to never become a victim of First Notice Day:
Step 1: Calendar It
Download your exchange's expiry calendar. Add every FND to your trading calendar with 7-day reminders.
Step 2: Read Broker Policy
Find your broker's "Expiry Policy" or "Delivery Policy" document. Know their cutoff dates.
Step 3: Roll Early
Never wait until the last minute. Roll or close at least 5-7 trading days before FND.
Step 4: Set Alerts
Enable email and SMS alerts from your broker. Don't miss expiry warnings.
Pro Tip: Trade the 2nd Month
Instead of trading the "front month" (nearest expiry), trade the second month contract.
- More time before FND concerns
- Often similar liquidity
- Less roll pressure
- Still tracks spot price closely
Example: In January, instead of trading Feb Crude, trade March Crude.
The Psychology of FND Victims
Why do smart traders still get caught? Psychology.
Loss Aversion
"I'm down right now. I'll roll when I'm back to breakeven." Breakeven never comes. FND does.
Overconfidence
"I know the date. I'll roll tomorrow." Tomorrow becomes the day after. Then it's FND eve.
Ignorance
"FND? What's that?" Most retail traders have never read their contract specifications.
Roll Cost Fear
"Rolling costs ₹2,000 in slippage. I'll wait." Then broker-forced closure costs ₹20,000.
"Every month, I watch traders lose more to FND than they would have spent on an entire year of roll costs. The penny-wise, pound-foolish mentality destroys futures accounts."
— Commodity Broker, 18 years experience
The Bottom Line
First Notice Day is not a bug in futures trading. It's a feature. It keeps the system honest — futures are meant to facilitate real commerce, not just speculation.
But for retail traders, it's a silent killer that claims victims every single month.
Your FND Survival Checklist
- Know the date: FND varies by contract. Learn yours.
- Know your broker: Their cutoff is earlier than exchange FND
- Roll early: 5-7 days before FND minimum
- Don't ignore warnings: Check broker emails
- Trade back months: Less FND stress, similar liquidity
- Accept roll costs: They're cheaper than forced liquidation
The best futures traders aren't just good at reading charts. They're good at reading calendars.
Mark your FND dates. Set your reminders. Roll early.
Because the one day every futures trader fears doesn't announce itself with breaking news or red candles.
It just quietly arrives — and takes whatever you forgot to protect.