David
April 20, 2020, 6:06pm
1
Due to unforeseen circumstances, we will roll over all open positions with Oil-21Apr to the next contract Oil-19May one day in advance, as the current contract has become illiquid.
The current contract was been suspended due to insufficient liquidity & widening spreads in the rollover market.
1 Like
sumit
April 20, 2020, 6:49pm
2
But if I don’t have the money to pay the difference for rollover then how it will happen?
David
April 20, 2020, 6:52pm
3
@sumit The rollover itself is net neutral because there’s an adjustment. Check these two posts:
@kpakpa There is something called a rollover with futures contracts. Since they have an expiration date, once it’s reached, your position is rolled over to the next futures contract. You had a position with Oil-20Mar which is now rolled over to Oil-21Apr.
Since there’s a difference between the prices of both these contracts - an adjustment must be made to cover the difference. The adjustment is equal to the difference in price between the two contracts times the quantity you own. You can find t…
@kpakpa The rollover doesn’t really affect the result - it’s just a way to balance the price difference.
Example: If you buy 10 contracts at $10 & the next contract is trading at $11, you’ll get a rollover adjustment of 10 x ($10 - $11) = -$10. This will be added to your result to negate the difference in prices.
Because you bought at $10 & now it’s at $11, you would’ve made a $10 profit. However, in order to balance things out due to the fact that it’s a different contract, a -$10 adjustment…
sumit
April 20, 2020, 6:54pm
4
Thanks for the reply, but how that adjustment will be made?
Thanks for the explanation. However, does that mean I have to pay the difference from the last trade in 21April20 at 0.7 and the current trade in May at 20.9? I had quite some short positions…
Hi, David
Excuse me, will this also apply to my account?
Hi David, never mind, I got the result (profit) from the 21April20 contract. All sorted. Thanks
krr13
April 20, 2020, 7:19pm
8
More examples of people who shouldn’t be trading CFDs if they don’t know how roll over of oil contracts work.
4 Likes
Hi David,
When the roll over will happen? Tonight after 7pm? I don’t have any position open yet for Oil -19 May.
George
April 21, 2020, 9:46am
10
For more info about the rollover impact on open positions, you can also check out this link
