CFD Expiration Dates

What are CFD Expiration Dates

Standard Contracts for difference (CFDs) on Indices, Commodities, and Bonds, which are based in the underlying Future contracts, have expiration dates. Using a weekly Rollover, these CFDs are switched to a new Future contract.

How Does the Expiration Date for CFDs Work?

As mentioned, contracts for difference (CFDs) have a rollover option. This option offers a provision to extend the Future contract if and when required. On the other hand, rolling daily CFDs have underlying open-ended contracts that don’t have an expiry date. These, however, are rolled over automatically from one to another trading day till finally getting terminated.

Before opening a CFD position, you need to understand if it is a rolling CFD or if it has an expiration date. For CFDs with expiration dates, their position will close on the date of the expiration, irrespective of the gain or loss of value of the underlying asset. However, that’s not the case with rolling CFDs.

Make a note that some brokers will provide you with both CFDs; one that rolling and the other that has an expiration date. For the latter, the expiry date tends to vary in each case. Hence, it’s important to go through the terms and conditions against each CFD to get significant returns on your CFD investment.

Your current pending orders like Stop loss, Take Profit, or Entry Limit/Stop pegged to an underlying asset gets adjusted, reflecting the price difference between the new and expiring contract on the rollover date at a specific time. In this case, the automatic rollover matches the cost you would have paid if the CFD position closed on the expiry date, requiring you to open another CFD position with a new underlying Future contract. You can avoid a CFD rollover by closing your open position before the date.

For more information on CF expiration dates at the TrueFx Markets, feel free to reach our support team.