A future contract carries an obligation to buy or sell the underlying asset in a determined time in the future, at a price set today.
Libertex trading platform allows you to trade CFD's on futures. CFD, or contract for difference, is a financial instrument allowing you to profit on underlying asset price fluctuations, without owning the asset itself.
CFD on Futures Trading Conditions
Future contracts do have a term specified by the stock exchange.
Futures also have an expiration date, upon which all trades based on the respective future contract a closed. To view the futures expiration dates, please refer to Instrument Specifications on our website.
When a future contract expires, all pending orders associated with it are cancelled.
Please note: As during the last days of a future's life its liquidity drops down drastically, the Company carries out the rollover to the nearest futures traded before the expiration date of the respective future contract.
To allow traders to hold long term positions on CFD's on futures, these traders are given an automatic rollover feature.
Trade Rollover Process
The result of the trade is determined upon a future contract expiration.
Technically, the trade is closed at the last contract price available.
The 'old' contract is substituted then with a 'new' one, applying different quotes.
The trade is opened with respect to a new contract, the amount and multiplier value staying the same. Technically, a new trade is made with regards to a new contract, so the spread is debited.
When a contract is rolled over, such an open price is calculated, so that at the moment of the first quote of the new contract available, the result of the previous trade received upon expiration may be saved.
To calculate a new open price on your own, you can refer to the following formula:
NewOpenRate' = 'NewContractPrice' * 'LastOpenRate' / 'ExpLastPrice', where:
NewOpenRate is an open price for the new trade
NewContractPrice is the first quote available for the new contract upon expiration of the previous one
LastOpenRate is the previous open price
ExpLastPrice is the last quote available of the previous contract.