Within the realm of CFD trading, Future Contracts play a pivotal role. However, traders need to comprehend what happens when a CFD Future contract expires, as this marks a critical juncture in the trading process.
Understanding CFD Future Contracts:
CFD Future Contracts are agreements between a buyer and a seller to exchange the difference in value of an underlying asset, such as stocks, commodities, or indices, between the contract's opening and closing. These contracts have a predetermined expiry date, a crucial aspect that distinguishes them from other CFDs.
Expiration and Trade Closure:
When the expiry date of a CFD Future contract arrives, a process known as trade closure is initiated. At this point, the contract ceases to exist, and traders need to be aware of the implications for their positions.
Automatic Closure:
Unlike traditional futures contracts on physical commodities, CFD Future Contracts are typically cash-settled. This means that upon expiry, the contract is automatically closed.
Trades are also able to close the trade before the expiration date.
Impact on Open Positions:
For traders with open positions in CFD Future Contracts, the expiry marks the end of their speculative journey on that particular contract. Any open positions are closed automatically at the prevailing market price.
Trades can trade the new contract 2 days before the expiration of the old contract.
What Futures can I find in NAGA?
Examples:
WIG 20 Futures Index: The index includes 20 Polish stocks which are listed on the main market.
Natural Gas Futures: One of the most popular Trading Futures Commodities
Coffee Futures: Arabica coffee is the world benchmark for coffee futures contracts
Copper Futures: Copper is the world's third most widely used metal after iron and aluminum and is primarily used in industries such as construction and industrial machinery manufacturing.
You can find more details here.
Do all the futures expire?
All futures have an expiration date except WIG20.
Here you can find the calendar of the expiration dates when the open trades will be closed
If you trade the WIG 20 Futures Index while the contract expires you will have a Rollover adjustment, for more details about RollOvers you can read this article ❗