What is the listing period of CFDs?
CFDs are contracts without a fixed date as they do not involve any actual delivery of commodities.
Can I hold an open position for a CFD for an unlimited period of time?
Yes, if your account has sufficient available funds to cover the open position.
What do the expiry dates for the futures contracts underlying CFDs indicate? What do the dates of transition from one futures contract to another indicate?
CFDs do not involve any time limitations. However, CFDs’ underlying futures contracts are listed for a limited period of time. Expiry dates of futures indicate the date when trading of a contract is closed.
FOREX CLUB generates a flow of CFD quotes based on the prices of the most liquid futures contracts, those with the nearest expiry date. When the nearest futures contract expires, a flow of CFD quotes must be transferred to the prices of the next futures contract. As a rule, this transition takes place at the market close on the last operational Friday preceding the expiry date of the futures contract.
What happens to CFD positions when a flow of quotes is transferred from one futures contract to another?
Most futures contracts are characterized by contango, meaning that quotes by more distant futures are somewhat higher than those of the nearest futures contracts. For example, the September crude oil contract (an agreement to deliver crude oil in September) is quoted at 75.49; the October contract is quoted at 75.86; the November contract is quoted at 76.78; and the December contract is quoted at 77.60.
Therefore, prices vary depending on contract expiry dates. This means that during transition of the flow of CFD quotes from one futures contract to another an open position will have a change of quotes due to this difference.
For example, during transition from the September contract to the October one, a trader will get an additional profit of $0.37 per barrel for the long position (75.86 - 75.49 = 0.37). To mitigate this effect, the transaction balance will be decreased by this value, with the difference in contract prices debited from the buyer’s account ($0.37 per barrel).
With regard to the short position, transition of the flow of quotes results in a loss of $0.37 per barrel. This loss will be compensated by means of crediting $0.37 per barrel to the account.
As a result, there is no effect on the final balance when the flow of CFD quotes is transferred from one futures contract to another.
Is any rollover fee applied to CFDs?
No rollover fee is applied to CFDs.
Why is a rollover fee applied to positions in gold and silver?
FOREX CLUB offers spot contracts for gold and silver that are based on the FOREX market. That is why gold and silver positions must be “swapped” on a daily basis. helps move the metal delivery date into the future.
How are the values of swap pips determined by spot metals?
To calculate swap rates for gold and silver, interbank interest rates that indicate the profit from depositing US dollars and gold (silver) are applied. The calculated rates can then be increased or decreased by the broker based on the swap calculation policy.
Is triple swap credited/debited for spot gold (silver) positions on Wednesday night?
Yes, because when an open position is transferred from Wednesday to Thursday, second-day delivery would fall on Saturday. Since Saturday and Sunday are not trading days, delivery is moved to the next working day, which is Monday. Therefore a triple swap is applied.
What happens to open metal positions during swap transactions?
Swap pips are calculated separately from price differences relevant to the position. The position remains open.