Hello Matt and David,
I was trying to understand what you were trying to explain here and I have a hard time with this. I read the other article also, so I would like to understand better.
- If I bought Oil21April as Matt said for 22$, and the current price for April contract is 18.1, when rollover happens I will lose 3.9$ or my new position will be at 25+3.9=28.9, since May contract has a price of 25$? Because you haven’t explained that part, it sounded more complicated than it should be. So I think Matt will lose 13,720 on the rollover, I think he didn’t understand that in the end. Only other than this, but the unlikely scenario, is to have my 22$ position transferred to a new May contract.
- Rollover can happen only on contract expiration, it can’t be triggered earlier?
- If my account is at margin call situation, what will happen?
Best regards,
Marko Milanovic