Oil-21Apr20 Rollover

[David]

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.

How will it affect my open positions?

[sumit]

But if I don’t have the money to pay the difference for rollover then how it will happen?

[David]

@sumit The rollover itself is net neutral because there’s an adjustment. Check these two posts:

Potential problem - further clarification needed

@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…

Potential problem - further clarification needed

@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]

Thanks for the reply, but how that adjustment will be made?
for adjustments also you need money in account.

[Riekiek]

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…

[VusalHuseyn]

Hi, David

Excuse me, will this also apply to my account?

[Riekiek]

Hi David, never mind, I got the result (profit) from the 21April20 contract. All sorted. Thanks

[krr13]

More examples of people who shouldn’t be trading CFDs if they don’t know how roll over of oil contracts work.

[moisaalin]

Hi David,

When the roll over will happen? Tonight after 7pm? I don’t have any position open yet for Oil -19 May.

[George]

For more info about the rollover impact on open positions, you can also check out this link

How will it affect my open positions?