CONTRACT ROLLOVER

CFDs contracts for commodity futures

When online trading CFDs contracts you can open your trading positions on commodity futures you choose. Here you trade always according to the next trading period of the chosen asset. Commodity futures are in their nature forward contracts and here the traders hedge their price positions of chosen asset according for certain time period. Commodity futures are traded on specialized commodity stock markets. Price of certain CFDs contract depends on price evolution of basement asset, usualy the most liquid¨commodities.

CFDs is purely financial instrument, used to hedge the assets price for stock trader. Nature of CFDs enables financial speculations for increase or decrease of assets price, CFDs exactly copy the evolution of commodity stock exchange, it means evolution of price, volatility, liquidity and contract rollover. Generally is valid, that the following contract period is always the most liquid one and the price for more distant periods may vary according to market expectations in the future. Every commodity futures contract has its own delivery and execution date, respectively expiration time. If the trader want to stay in his (her) trading position without financial clearing of held position, his position may be "rollovered" to next contract period. For majority of futures, contract period is  mostly one month. For stock indices it is usualy a quarter.

CFDs and futures contract rollover

If you hold a contract, which was traded for the price X, this contract expires and new contract opens on the price Z, than your account has to be adjusted by adding or discounting the difference between A nad Z price accordingly to the direction of pisition (long or short). This is not, what electronic stock exchange CFDs do, it is standard practise on market an in trading procedures. Participants on CFDs exchange should understan this fact and know how the markets work and behave. For their knowledge or nescience do not take responsibility the market maker neither any other subject. If the market would work the way, that you could see where the futures contract will be traded and if the price will be higher or lower than the present price, than the traders would enter to long (or short) positions close to day of contract expiration. Is clear, that this way of trading and stock exchange working would not be advantageous even useful neither for traders or brokers and it would not lead to worthy trading exchange partnerschip.

For your brief overview, rollovers are made always at 16:15 EST and they are placed in the next trading session. Market maker of the CFDs exchange usualy keeps away of trading during the last two days of the period for futures contracts. It is because of the increased volatility of the price during the last two days. Wider range of the price movements from bottoms to tops does not reflect the activity of the whole market. On the other side, market maker wants to rollover the contracts as close to the expiration date as posssible, thus the "First notice day" of any contract is not reflected by the stock exchange executives. Furthermore, rollovers are managed on apropriate stock exchanges and elektronic exchange CFD does not have the control above their execution. The whole process is completely automatized and as such is displayed and published when the rollover comes to execution. This way you can see the price on your trading platform in the real time. Rolovers may be done several days before or after the previousely noticed date. If you have opened CFDs position during the rollover and this will be overvalued, this fact will be reflected to your account ballance (including your account statement) and you will be warned to this reality by the market maker executive person.

As active traders you should know how the market works. Above all the futures markets which are on offer here and on which you will trade. You can contact market dealer at any time for assistance with the exchange business with any question.