Our forward CFD contracts derive their pricing from the front-month futures contract. Unlike Exchange Traded futures, where the buyer can choose to have their position cash settled at the expiration date, our forward CFD markets will be automatically rolled shortly before the expiration date of the underlying contract into the next month’s contract.

Any open positions held over the contract rollover date will be cash-adjusted for the step up/down in the change of the price to the next-month contract. This will ensure smooth and continuous pricing. Traders can, of course, close positions as per their strategy at any time of their choosing, just as they would do with any of our cash markets.

Traders familiar with our cash markets understand there is a daily funding charge/payment (Swap)(depending on the product and whether the position is held long or short). If the position is held past the daily rollover time, with forward CFDs there is no overnight funding and no daily adjustment for dividends; rather, this is factored into the price of the forward contract. View our trading spreads, swap rates and commissions on our website for more details.

As each day passes, the cash and forwards price will converge due to the reduction in the ‘basis’ or ‘fair value’, and it gets closer to the set expiration date of the underlying futures contract.