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OIL ROLLOVER

Oil Rollover Explained

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HOW OIL ROLLOVER WORKS

When you’re trading an instrument, such as Oil on the MT4/MT5 platform, if you hold that position over the monthly expiration date of the futures contract that its price is based on, you will encounter what’s called a rollover. This is because Oil is a futures contract which has a set expiration date.

If you do not wish for your position to be rolled over, then you should close your position prior to the rollover date.

Do I Incur Any Losses During the Oil Rollover Process？

The monetary impact is largely nullified, as the changes in values of the open positions, are offset by a debit or credit adjustment made to the account. It appears on your statement as ‘Cash Adjustment-Rollover’

Example:
CL-OIL futures (May contract) expires with the ask at $20.050 and bid at $20.000.

New CL-OIL futures (June contract) opens trading at ask $26.050 and bid $26.000.

One Standard contract size for CL-OIL is 1,000 barrels.

If you hold one lot of long CL-OIL, you will be charged (26.050-20.000) *1000 = -$6050.
The ‘Cash Adjustment- Rollover’ is Dr -$6050

If you hold one lot of short CL-OIL, you will be credited (26.000-20.050) *1000 = +$5950.
The ‘Cash Adjustment- Rollover’ is Cr +$5950

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