Education - Understanding Futures CFDs
Learn about Futures CFDs and how to trade them with Rockfort Markets
When you’re trading an instrument, such as Oil on the MetaTrader 4 platform, if you hold that position over the monthly expiration date of the futures contract that its price is based on, you will encounter what’s called a rollover. This is because Oil is a futures contract which has a set expiration date.
If you do not wish for your position to be rolled over, then you should close your position prior to the rollover date.
Do I incur any losses during the oil rollover process?
The monetary impact is largely nullified, as the changes in values of the open positions, are offset by a debit or credit adjustment made to the account. It appears on your statement as ‘Cash Adjustment-Rollover’.
Example:
CL-OIL futures (May contract) expires with the ask at $20.05 and bid at $20.00.
New CL-OIL futures (June contract) opens trading at ask $26.05 and bid $26.00.
One Standard contract size for CL-OIL is 1,000 barrels.
If you hold one lot of long CL-OIL, you will be charged (20.00-26.05) * $1,000 = -$6,050.
The ‘Cash Adjustment- Rollover’ is Dr -$6,050
If you hold one lot of short CL-OIL, you will be credited (26.00-20.05) * $1,000 = +$5,950.
The ‘Cash Adjustment – Rollover’ is Cr +$5,950