CFD rollover and expiry: what happens when a futures-based CFD expires

A futures-based CFD, also called a dated or forward CFD, tracks one specific futures contract and expires shortly before that contract does. At expiry your position is either closed at the provider's final price, or rolled into the next contract month, which in practice means the old position is closed and a new one opened at the next contract's price. The price difference between the two months is not a cost in itself, but the spread on both legs, any roll fee, and changes to your orders and margin are, and they catch out traders who did not realise their CFD had an expiry date.

This guide is about that moment: what happens at expiry and rollover, what it costs, and how to plan for it. For why futures exist and how the curve behaves, see how commodity futures work. For the choice between cash and futures-based index products in general, see index futures vs index CFDs and trading index CFDs.

Dated CFDs and cash CFDs: a quick recap

Most CFD providers offer two designs on indices and commodities:

• Cash, rolling or undated CFDs have no expiry from your point of view. You pay or receive overnight financing every night, and on commodity CFDs the provider makes periodic roll adjustments to your account when it switches the underlying futures reference. The position itself is never closed by the roll.
• Futures-based (dated) CFDs are priced from a named futures contract, such as the December or March index future, or the next month's crude oil future. They usually have no daily financing charge, because the cost of carry is already in the futures price, and no separate dividend adjustments on indices. In exchange, spreads are usually wider and the contract expires.

The rest of this guide is about the second type. If your platform shows a symbol with a month or a date in its name, such as "US500 Mar", "Oil Dec" or a futures-style code such as Z for December and H for March, you are almost certainly holding a dated contract. Futures month codes run F (January), G, H, J, K, M, N, Q, U, V, X and Z (December).

When dated CFDs expire

The provider sets the CFD's last trading time a little before the underlying futures contract stops trading, so that it can close or hedge its own positions in an orderly way. The exact dates are in the contract specification and usually also in a published rollover or expiry calendar.

Typical patterns, which follow the futures markets:

• Equity index futures run on a quarterly cycle: March, June, September and December. Major US and European index futures generally expire on the third Friday of the contract month. Trading volume normally moves to the next contract around a week before expiry, so dated index CFDs often expire or roll in the week before.
• Crude oil (WTI and Brent) has a contract for every month, and the front contract expires well before the delivery month begins. Dated oil CFDs therefore roll monthly. The oil trading guide and Brent vs WTI cover the benchmarks.
• Natural gas also has monthly contracts. See natural gas trading explained.
• Gold and silver futures have active months spread through the year rather than every month, and the most traded month changes as each one approaches delivery.
• Government bond futures generally run on a quarterly cycle, like index futures. See bond CFDs on the Bund, gilt and Treasury.

The practical consequence: a dated index CFD position might face four expiries a year, while a dated oil CFD faces twelve. Each one is a decision point and a cost.

What happens at expiry: the two outcomes

1. The position is closed

If your provider does not roll automatically, or you have opted out, the position is closed at expiry. The closing price is set by the provider according to its terms, usually based on the underlying futures price at a defined time, adjusted for the spread. The gain or loss is realised in your account and the margin is released.

You will not receive any oil, and you will not be exposed to delivery. CFDs are cash-settled contracts with the provider; the provider deals with the futures side.

2. The position is rolled

Many providers offer to roll dated positions into the next contract automatically, either by default or if you opt in. A roll is normally carried out as two trades:

• your existing position in the expiring contract is closed at its price at the roll time;
• a new position of the same size and direction is opened in the next contract at its price.

Because these are two separate trades, your gain or loss on the old contract is realised at the roll, and the new position starts with a new opening price. On your statement the position looks like it has closed and reopened. Some providers charge a fee for the roll or apply their normal spread to both legs; others offer a reduced spread on rolls. The rollover terms say which.

What a roll costs: the price gap versus the real cost

Two contract months almost never trade at the same price. For equity indices, the next contract is usually priced higher than the expiring one when interest rates are above the dividend yield of the index, and lower when dividends are higher. For commodities, the difference reflects storage, financing and supply conditions: the curve can be in contango (later months higher) or backwardation (later months lower).

When your position rolls, its quoted price jumps by that difference. This looks alarming on a chart, but it is not a loss or gain created by the roll. The new contract simply prices in a different future date. What you actually pay at the moment of the roll is the spread on the close and the reopen, plus any roll charge.

The price difference does matter over time, in a different way. A futures price tends to move towards the spot price as expiry approaches, other things equal. If the next contract is priced 30 points above spot because of carry, that premium tends to erode over the following three months. For a long holder that erosion is the equivalent of the overnight financing a cash CFD would have charged. It is built into the price instead of debited from your account. That is the "roll yield" effect described in the commodity futures guide.

Worked example 1: rolling an index position

Illustrative numbers only. You are long 2 contracts of a dated US 500 CFD, December expiry, where 1 contract = 10 dollars per index point, so your position is worth 20 dollars per point. You opened at 5,900.

On the roll date the provider quotes:

• December contract: 6,010 bid / 6,012 ask (mid 6,011)
• March contract: 6,043 bid / 6,045 ask (mid 6,044)

Your position is rolled automatically:

• Close December at the bid, 6,010. Realised gain: (6,010 - 5,900) × 20 = 2,200 dollars.
• Open March at the ask, 6,045. You are now long 2 contracts of March from 6,045.

The 35-point difference between 6,010 and 6,045 is made of two parts. The 33-point gap between the mids reflects the different expiry dates and is not a cost. The remaining 2 points (1 point of half-spread on each leg) are the cost of the roll: 2 × 20 = 40 dollars. If the provider also charges a roll fee, add it.

Worked example 2: rolling a short oil position in backwardation

Illustrative numbers only. You are short 0.5 lots of a dated WTI CFD where 1 lot = 1,000 barrels, so 500 barrels. The front contract is quoted at 78.37 / 78.43 and the next month at 77.57 / 77.63, a backwardated curve.

• Close the front contract by buying at the ask, 78.43. Your gain or loss on the old contract is realised against your opening price.
• Open a new short in the next month at the bid, 77.57.
• Roll cost: half the 0.06 spread on each leg, so 0.06 per barrel in total, × 500 barrels = 30 dollars.

The new short starts 0.86 dollars lower than where the old one closed, but that is not a gain: it is the curve. In backwardation, if the curve shape stays the same, the new contract will tend to drift up towards the spot price as it approaches expiry, which works against a short. In contango the effect reverses. Repeated twelve times a year, these effects can be significant, and you cannot know in advance how the curve will change.

What happens to your orders

This is where many traders get caught. Providers handle open orders at a roll in different ways:

• Orders are cancelled. Some providers cancel stop losses, take profits and pending orders on the expiring contract. The rolled position then has no stop until you set a new one.
• Orders are carried over at the same price. The stop on your new position sits at the same level as before, even though the new contract is priced differently. In example 1, a stop at 5,850 on the December contract would be 160 points below the old price but 195 points below the new March ask, so the stop is now effectively further away, and your risk is larger than planned. For a short, or in a curve sloping the other way, the stop can end up much closer, or even be triggered immediately.
• Orders are carried over and adjusted by the price difference between the contracts, so they keep the same distance from the market. This is the cleanest outcome, but not universal.

Read the rollover policy and check your orders straight after every roll. If you size positions with a position size calculator, recalculate after the roll, because your stop distance may have changed.

What happens to your margin

The new position needs margin based on the new contract's price, which may be slightly higher or lower. More importantly, the roll often requires that you have enough free margin at the moment of the roll. If you do not, the provider may not roll the position at all and simply close it at expiry. Since the close realises your gain or loss, a large realised loss can also change your account's margin level. Our guide to margin calls and stop-outs explains how margin level is calculated.

Under ESMA rules, EU retail margin for major index CFDs is at least 5% and for commodities other than gold at least 10%, whether dated or cash. Providers can require more. The margin calculator can show the requirement on the new contract.

Charts, indicators and backtests across a roll

Because each dated contract is a different instrument, your platform may show:

• separate symbols for each month, so the chart for the new contract only starts when it was listed, with limited history; or
• a continuous chart that joins the contracts together, with a visible jump at each roll date.

A jump on a continuous chart is not a real price move. It can distort indicators, such as moving averages and ATR, and trigger signals that no trader could have acted on. Some charting platforms offer back-adjusted continuous futures, which shift older prices by the roll gaps to remove the jumps. If you backtest a strategy on dated CFD or futures data, check how the history was joined, or results can be misleading.

Roll, close, or switch to a cash CFD?

There is no general answer, but the decision usually comes down to three things.

• How long you plan to hold. For a position of a few days, a dated CFD that expires in the middle of it adds a roll cost and an order-handling risk. A cash CFD may be simpler. For a position of several months on an index, a dated CFD can be cheaper overall than paying nightly financing, even with a roll or two. The swap calculator can estimate the financing side.
• How often the market rolls. Monthly oil rolls mean twelve spread payments a year on a dated CFD. Quarterly index rolls mean four.
• Your provider's terms. A reduced spread on rolls changes the calculation in favour of rolling; a fixed roll fee changes it against.

To compare like with like, build the all-in cost for your holding period, as in how to compare trading costs: spreads on entry, exit and each roll, plus any fees, against spreads plus nightly financing on the cash alternative.

Common mistakes

• Not knowing a position has an expiry. Traders who pick a dated contract by accident, because its price looked different or its spread was the one on screen, find it closed on a date they did not expect.
• Treating the roll gap as a loss or gain. The jump between contract months reflects carry and supply conditions. Only the spread and fees are the cost of the roll.
• Leaving stops unchecked after a roll. A stop carried over at the same price can be much nearer or further than intended, or gone altogether.
• Rolling with too little free margin. The provider may close the position rather than roll it.
• Reading continuous charts as if the roll gaps were real moves. Indicators and backtests across those gaps can be distorted.
• Ignoring the curve on long holds. In steep contango, repeatedly rolling a long position can be a drag even if the spot price goes nowhere.

Frequently asked questions

Do CFDs expire?

Cash or rolling CFDs do not expire from the client's point of view, although they carry overnight financing and, on commodities, periodic roll adjustments. Futures-based (dated) CFDs do expire, shortly before the futures contract they track, and are then closed or rolled. Share CFDs generally do not expire.

Will I have to take delivery of oil if I hold a CFD to expiry?

No. A CFD is a cash-settled contract with your provider. At expiry the position is closed at the provider's final price or rolled into the next contract. Physical delivery only arises with exchange-traded futures held through their delivery period, which retail CFD traders are not exposed to.

Why did my CFD price jump at the roll?

Because the new contract month trades at a different price from the expiring one. On a dated CFD the position is closed and reopened at the new contract's price, so the opening price changes. On a rolling CFD the provider makes a cash adjustment to offset the jump. Either way, the jump itself does not create a gain or loss; spreads and fees do.

Is it cheaper to roll or to close and reopen myself?

It depends on the provider. Some offer a reduced spread on automatic rolls, which makes rolling cheaper than closing and reopening at normal spreads. Others charge a roll fee. Doing it yourself gives you control over timing and order levels. Check the provider's rollover terms and compare the actual spreads.

How often do oil CFDs roll?

Dated crude oil CFDs typically roll monthly, because WTI and Brent futures have a contract for every month. Equity index futures run quarterly. Rolling commodity CFDs follow the provider's own roll calendar, which is published in advance.

Does a roll affect my stop loss?

It can. Depending on the provider, stops and other orders may be cancelled, carried over at the same price level, or adjusted by the difference between the contracts. A stop carried over at the same price can end up closer to or further from the market than you planned, so check every order after a roll.