CONTRACT ROLL-OVERS



Contracts CFDs on Commodity Futures

In the frame of the Online trading CFDs you can open your positions on selected commodity futures. You trade always with the nearest contract period of the selected asset. Commodity futures are in their dispositions forward contracts, in which commodity tradesman price their positions of the selected asset to the particular time period. Commodity futures are traded at the specialized commodity exchanges. Particular CFDs contract is always dependent on the underlay asset, by which are here selected the most liquid commodity futures.

 

The CFDs are purely financial instruments, by which the trader prices the selected underlay asset. The CFDs in their dispositions allow financial speculations for the increase or decrease of the asset’s price, CFDs are exactly copying, what happens at the commodity exchange, it means price development, the conditions of volatility, liquidity or herein mentioned rollover of the contracts. It is generally accepted, that the nearest contract period is always the most liquid and the prices of the next contract periods can differ according to the market expectations in the direction of future. Each commodity futures contract has its own delivery date or settlement day, or more precisely the expiration date. If the trader wish to stay in his trading position without the financial settlement of the held position, his held position can be so called rollover to the next contract period. Contract period is for the most futures one month, for the stock indices it is mostly one quarter.

CFDs Futures Contract Roll-over

If you have a contract which was traded for the price x, and then the contract will expire and new contract will open for the price z, your account has to be settled by adding or countdown of the difference according to the direction of the position. This is not something what the electronic exchange CFDs does; it is standard practice at the market and in the trading procedures. The participants of the CFDs exchange should understand this fact and be alive of how the markets are functioning. For the level of their knowledge the market entrepreneur doesn’t bear any responsibility. If the market was functioning so that you can see, where the future contract would be traded and if it would be for higher price than is the current one, then near the expiration day all traders open the long positions and take advantage from the rollover or the other way round. This way, how is certainly clear, would not be beneficial neither for the traders nor for the brokers and would not lead to valuable trading partnership.

 

For your review of rollovers, they happen afternoon around 16:15 EST, to be placed for following trading segment. The time of the rollover, which is usually used, is two days prior to the last trading day of the expiring contract. The keeper of the CFDs exchange avoid using of the last two days, because they can be extremely volatile and can have great spreads between the lowest and the highest prices, which don’t reflect the whole market activity. But the keeper wants to rollover the contracts as near the expiration day as possible, and thus “First Notice Day” the date of any contract is not considered. Except this, the rollovers are organized at the particular exchanges and electronic exchange CFDs doesn’t have the control over when it will be done. All the process is automatic and so it is displayed when it happens and that’s why you can see this price in the real time at your trading platform. The rollover can appear several days ago or after the scheduled date. If you have in the time of the rollover opened CFDs contract and it will be overvalued, this fact will appear at your account statement and you will be informed in writing through e-mail by the entrepreneur of the CFDs exchange.

 

As the active traders you should be aware of functioning of the markets. Particularly the futures markets, which are offered here and where you trade. You can always contact the trading dealer for the assistance regarding this matter if you are not sure.  

 

The roll plan of the particular commodities is listed on the internet sites of the electronic exchange. You can find the roll schedule of the CFDs futures contracts here.   
                           


   

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