Do I incur Any Losses During the OIL Rollover Process?

NO. What happens is that the value of your position continues to reflect the impact of market movement based on your original opening level, size and spread. If the new contract is trading at a higher price, Buy positions will receive a negative adjustment, whereas Sell positions will receive a positive adjustment. Conversely, if the new contract is trading at a lower price, Buy positions will receive a positive adjustment and Sell positions will receive a negative adjustment.

Example of rollover adjustment calculation:

You hold a Buy position of 100 contracts of Oil futures.

Oil futures rates at the time of rollover:

Existing contract Buy rate = $81.30

Existing contract Sell rate = $ 81.25

New contract Buy rate = $82.50

New contract Sell rate = $ 82.45

Adjustments calculation:

Sell Rate Difference = [New contract sell rate] – [Existing contract sell rate] = $82.45 – $81.25 = $1.20

Buy Position Adjustment = – ([Amount of contracts] * [Sell rate difference]) = – (100 * $1.20) = – $120

Result after adjustment:
You will continue to hold the same position of 100 contracts of Oil futures. An adjustment of -$120 will be added/subtracted. Your equity remains the same.

All Oil rollover adjustments are calculated in the currency that the instrument is denominated in. If your account is denominated in another currency, your account will be converted at the current market rate.

*Errante offers automatic rollover for new contracts of financial instruments that have an expiration date.

** As trading platforms do not support negative prices on financial instruments, in the unlikely event the price of any energy instrument (USOIL, UKOIL and NATGAS) approaches 0, Errante will start closing all open positions at the last available price.

For more information regarding the terms and conditions please click here.

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