David
April 23, 2020, 6:35am
43
@BigShort The idea of a rollover is not to close the position. You can just click x & open a new one if you wish to avoid the correction but that beats the whole point.
@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…