First Notice Day (FND) is the first day on which a delivery notice may be issued in the delivery process for a physically deliverable futures contract under the applicable exchange rules. It is a formal contract milestone, not necessarily the date on which the underlying commodity or security changes hands and, in some contracts, not even the first point at which a long position can become operationally committed to the delivery process.
Notice, assignment and delivery can occur on different days
A short position initiates delivery according to the contract's rules, normally through its clearing firm. The clearinghouse typically operates at the clearing-member level rather than selecting an individual customer directly. Under CBOT Rule 713, for example, the Clearing House assigns deliveries to clearing members carrying eligible long contracts, and a clearing member receiving a delivery notice assigns the delivery to the oldest open contracts on its books. The precise customer-level allocation process can nevertheless depend on the product and clearing firm's applicable procedures.
Treasury futures show why First Notice Day should not be treated automatically as the first instant of assignment risk. In CME's Treasury delivery process, the short clearing firm declares its intention to deliver on Intention Day, also called Position Day for the long side. CME Clearing then matches long and short clearing firms that evening. First Notice Day follows on the next business day, when the invoice and details of the Treasury securities to be delivered enter the process. Delivery itself occurs later. Notice, matching and transfer are therefore separate events.
The date and sequence are contract-specific
First Notice Day must be taken from the current contract specification or exchange rulebook. For CME Treasury futures, it is the business day before the first business day of the delivery month, whereas ICE FCOJ-A futures specify the first business day of the expiring month. Other physically delivered contracts use different notice periods and procedures. Cash-settled futures do not use a physical-delivery notice process; their final settlement follows the applicable cash-settlement rules.
For a trader who does not intend to take delivery, the important date is therefore the earliest point at which the position can enter the applicable contract's delivery workflow. General guidance to exit a long position before FND is useful for many physically delivered contracts, but it should not replace the product's actual rules. A robust roll or delivery-risk calendar may need to distinguish First Position or Intention Day, First Notice Day, Last Trading Day and the relevant delivery dates rather than treating any one of them as a universal expiration threshold.