Most of our Indices and Commodities CFDs are based on future contracts.
Their price is very transparent🍳, but it also means they are subject to monthly or quarterly 'Rollovers'.
The future contracts we price our Indices or Commodities markets on normally expire after 1 or 3 months. Therefore, we must switch (rollover) our CFD price from the old contract to new futures contract. Sometimes the price of an old and new future contracts are different, so we must do a Rollover Correction by adding or deducting a one time only swap credit/charge on the trading account at rollover date to reflect the change in market price.
The correction is completely neutral for the net profit on any open position.💰
For example:
Current price of old OIL future contract (expiring) is 22.50
Current price of new OIL future contract (to which we switch CFD price to) is 25.50
Rollover Correction in swaps is $3000 per lot = (25.50-22.50) x 1 lot i.e. $1000
If you have long position - BUY 1 lot of OIL at 20.50.
Your profit before rollover is $2000 = (22.50-20.50) x 1 lot i.e. $1000
Your profit after rollover is also $2000 = (25.50-20.50) x 1 lot - $3000 (Rollover Correction)
If you have short position - SELL 1 lot of OIL at 20.50.
Your profit before rollover is -$2000 =(20.50-22.50) x 1 lot i.e. $1000
Your profit after rollover is also -$2000 =(20.50-25.50) x 1 lot + $3000 (Rollover Correction)
A detailed list of Rollovers dates for all instruments can be found in Account Information/Instrument Specification section of our website under this link.