What is an interrupted date?

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In the financial world, the term “breakout date” is used to describe a forward contract with an unusual term or expiration date, such as seven weeks instead of two months. The slang terms “cock date” or “odd date” are also used in reference to the same situation. There are several reasons why people might develop a fixed-term contract with a broken date, and it is usually highlighted in the contract to ensure that the parties are aware of the unusual terms.

The financial community generally prefers to use standardized time periods when creating contracts of convenience. People can set up a forward exchange, for example, with an expiry date of one or two weeks, one month, six months, and so on. Using standardized dates as much as possible helps people track their contracts. If someone buys a two-month contract in mid-September, for example, the contract expires on November 15th. This makes record keeping more convenient as well as simplifying trading.

With a broken date, the terms of the contract break the pattern. In the example above, the contract expiration date might be November 10th instead of the 15th. A contract might be written with an unusual term, such as five weeks or seven months. The term is agreed upon while the parties negotiate the details of the contract, and people can use a broken date to avoid a conflict or for other reasons. There may be a specific reason why a person wants a contract to expire earlier or later than other contracts generated at the same time to take advantage of market conditions.

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Traders keep careful track of the futures contracts in their names and can buy, sell and trade these contracts, treating them like securities. When a breached-dated contract is transferred, attention can be drawn to the date to alert the new owner, and buyers sometimes specifically look for these contracts because they can be advantageous in some situations. Electronic registration and databases can be very useful for anyone trying to keep track of multiple contracts, with reminders as contracts expire so people don’t miss taking action on an expiring contract.

The expiration date of a contract is usually clearly disclosed in several places in the documentation so that there is no confusion. When generating a contract and signing paperwork, if the due date is unexpected or doesn’t seem to coincide with the date agreed in negotiations, people should address this before signing the contract and legally committing to the written terms.

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