Upon a market reaching expiration we move the pricing of our that specific market contract from the current Futures month, to the next available month. This means that trading will cease on the market in question during normal trading hours, and will not reopen again for a period of time (typically for 2 hours). During this time, clients with any open positions on the specific market will have their balance amended in line with the pricing difference between the two contracts and all pending orders will be deleted.
Accounts with open positions in the market concerned will need to have adjustments entered. These adjustments occur because the price differential for the next available contract may be priced a number of points higher than or lower than the original, therefore some clients will see a balance adjustment to take into account that their open positions are going to move by that points differential when the market reopens. For example, if you have an open short position at $1 per point on Brent Crude, and assuming the price differential is +100 points when the market rolls, you will receive a credit of $100 for your open position, but your open trade equity will decrease by the same amount. This will mean that your total trading capital will remain exactly as it was prior to the adjustment taking place.
Likewise, if you have an open long position at $1 per point on Brent Crude, and again assuming the price differential is -100 points when the market rolls, your balance will be debited by $100 in order to allow for the increase in your open trade equity. Once more, this will mean that your total trading capital will remain exactly as it was prior to the adjustment taking place.
If it is the case where the debiting adjustment of the your account would result in your balance going negative, we will then manually close the open trade, realising the loss, and re-book it immediately at the new June based level – once again ensuring that there is a net zero effect. If you have any questions on markets reaching expiry, please do not hesitate in getting back to us.
|Euro Bund||07th December|
|Euro BOBL||07th December|
|US Soybeans||30th December|