If you trade futures CFD products, your position will have an expiration month, and will automatically roll over to the next futures contract when the expiration month arrives. The expiration month, you can see in the full name of the product name, such as US Dollar Index 09‘20 Auto-Rollover, which stands for the automatic rollover futures due in September 2020.Generally, we will conduct the rollover on the first Friday (London time)of the expiration month. You can go to Corporate Action and Future Rollover for specific rollover arrangement. We generally announce the rollover date 1-2 weeks in advance.
In order to deduct the impact of the new contract price (price) on the overall position value, we will adjust the net value of your account. The new position value will continue to follow the market fluctuations according to your original opening price, size and spread.
If the new futures contract is traded at a higher price and you hold a buy position, you will receive a negative adjustment on balance: while a sell position will receive a positive adjustment. Conversely, if the new contract is trading at a lower price, the buying position will receive a positive adjustment, while the selling position will receive a negative adjustment. This operation is very similar to stock CFD dividends.
Example of calculation of futures rollover adjustment
Suppose you hold 1 long position (with a contract size of 100) of USD index futures contract.
During the futures rollover, the price of the US dollar index futures:
- Current contract Ask Price / Buying reference price = $95.60
- Current contract Sell Price / Selling reference price = $95.15
- New contract Ask Price / buy reference price = $95.90
- New contract Sell Price / Sell reference price = $95.65
Then your account will be adjusted to:
(95.15-95.65) "Change in selling price" x 100 "contract size" x 1 "lot" = -50 USD
Subsequently, you will continue to hold the same US dollar index futures contract, your account will be increased/deducted -$50, but your account equity remains unchanged.