Commodity and Index Rollover Information

On Future Contracts, we may, in our sole and absolute discretion, set an automatic Rollover to the next tradable contract for a specific Instrument. In the event we set an automatic Rollover for a specific Underlying Asset, it is your responsibility to make yourself aware via information that are displayed in our Trading Platform in the details link for each Future Contract. Where an automatic Rollover occurs, the original position will remain open and continue trading on the next contract. In these cases, an adjustment will be made to your balance in order to reflect the difference between the price of the expired contract and the price of the new contract.

Clients will incur the same fees as closing an old contract and opening a new one manually. The fee includes the spread cost of closing the old contract and opening a new contract plus the overnight interest charge (These are the swaps long and swaps short amounts indicated on the asset specifications).

In most cases, the rate (bid/ask prices) of the new contract will be different from the old contract. Therefore, the company takes necessary precautions in order for the client not to be burdened with the price difference on his new position. Consequently, a rollover adjustment will occur automatically on client’s account to ensure both the client and the company did not benefit or disadvantaged from the rollover.

In order to calculate the rollover adjustment amount, the rate of the old contract and the new contract will be used at exactly the same time before contract expires. Consequently, the price difference between contracts and the spread will be accounted for. The resulting rollover amount will be then debited or credited to the clients account as a rollover adjustment. The calculation is as follows:

Buy position:

(Volume¹ * (Bid price (old contract)– Ask price (New contract))) * Conv. Rate²

Sell position:

(Volume * (Bid price (new contract))– Ask price (old contract))) * Conv. Rate

The general rule of thumb considered in order to decide if the amount will be debited or credited is shown below:

If (new contract price < old contract price) debit for short, credit for long

If (new contract price > old contract price) debit for long, credit for short

Example 1

A client with a GBP account holds a buy position of 10 contracts on DAX performance index (Instrument currency: EUR). At the time of rollover, the DAX rates are as follows:

Bid (existing contract) = 12,228.00, Ask (existing contract) = 12,231.00

Bid (new contract) = 12,232.00, Ask (new contract) = 12,236.00

EURGBP rate = 0.9

In the above case the formula applies as follows:

(Volume * (Bid price (old contract)– Ask price (New contract))) * Conv. Rate

(10 * (12,228 – 12,236) * 0.9 = -£72.00

As a result, the client continues to hold the same long position of 10 contracts of DAX and his account will be debited with £72.00.

Example 2

A client with a GBP account holds a sell position of 1000 barrels on light sweet crude oil (Instrument currency: USD). At the time of rollover, the CL rates are as follows:

Bid (existing contract) = 61.74, Ask (existing contract) = 61.87

Bid (new contract) = 61.95, Ask (new contract) = 62.15

USDGBP rate = 0.78

In the above case the formula applies as follows:

(Volume * (Bid price (new contract))– Ask price (old contract))) * Conv. Rate

(1000 * (61.95 – 61.87) * 0.78 = £62.40

As a result, the client continues to hold the same short position of 1000 barrels of CL and his account will be credited with £62.40.

¹ Volume = Lots * Contract size

² All Rollover Adjustments are calculated in the currency the Instrument is denominated in. If an account is denominated in a different currency the system will automatically convert this to the account’s currency using the market rate at that time.