All Axi index contracts are based on a relevant futures exchange price. Future contracts have an expiry date that can be several months ahead, and those forward prices can be higher or lower than the cash price, depending on market conditions.
To avoid the risks of final day volatility, Axi “rolls over” contracts one trading day prior to the exchange expiry. To ensure clients are not adversely affected, Axi will simply make any necessary cash adjustments.
The date post which the CFD contract matures is the CFD contract rollover date. A futures contract's expiration date serves as the final day you can trade that particular contract. Before the contract expires, a futures trader has three options:
- Offsetting or liquidating the position
- Settlement
- Rollover
A rollover is when a trader moves their position from the front-month contract (close to the expiration date) to another contract date in the future, to avoid the costs or obligations associated with the settlement of the contracts. Contract rollovers are profit neutral.
You can view a full list of important CFD contract rollover dates here.
Rollover examples
Let us say the SPI for March closes at 5050/5051, and the SPI for June opens at 5000/5001.
Example 1: You buy 10 contracts
If your position is a Buy, it closes on the old Bid price of 5050 and reopens on the new Ask price of 5001. Because you are in a Buy and the new market price has decreased, your open trade P&L has made a loss. As a result, you will receive a positive adjustment amount in your swap column equal to the difference between the old Bid and the new Ask.
You will receive (5050-5001) x 10 contracts = $490 AUD
Example 2: You sell 10 contracts
If your position is a Sell, it closes on the old Ask price of 5051 and reopens on the new Bid price of 5000. Because you are in a Sell and the new market price has decreased, your open trade P&L has made a gain. As a result, you will receive a negative adjustment amount in your swap column equal to the difference between the old Ask and the new Bid.
You will receive (5051-5000) x 10 contracts = -$510 AUD
Will my future position be closed when the contract expires?
Your futures contract position will not be closed when the future contract expires. It will remain open; the position will be rolled over and a cash adjustment will be applied to your account.
You can see expiry dates for all CFD products directly on our website here.