Hi, How do you rollover an index futures without realizing your loss? Simply closing current contract and re-buying the farther contract means cutting loss such that you may not be allowed to keep the same number of contracts. Does buying a spread in the farther contract automatically rollover your expirating contract without locking in your losses?
Let's say you just initiated a long position in YM 2 weeks before it expires in sep and you want to extend it to the next contract in dec... how do you rollover without locking in your losses?
You really should not be trading futures without an understanding of the basic mechanics. YM is CASH settled, so on expiration it will cease to exist in your account my man. You can then write the loss of on your 2006 TAX return. http://www.cbot.com/cbot/pub/page/0,3181,492,00.html
I know it is cash settled at expiration. My question is let's say if you were trading YM 2 weeks before Sep expiration and you wanted to rollover that position 1 week before it expires to Dec,how do you do it without cutting loss and restarting a new one This is like asking "do you know where is the gents?" and getting a reply "hey dude, just do it" I just want to know if it can be done without locking in the unrealised loss BEFORE expiration
SCALPBATER: Once you close the position, it is realized P & L. Take your licks and move on to December. You will save the commission by letting it expire vs closing it out if that makes you feel any better. Have you thought about paper trading? http://www.globalmarket-opps.org/for_teens/preview_papertrading.html
With most brokers every day is a new day http://financial-dictionary.thefreedictionary.com/Marked-to-market
scalpmaster: here is the direct answer to your question... When rolling any futures contract over from front month to back month, the spread in between is either gain or loss. Sometimes there is a premium on the front month (usually in commodities) but mostly there is a deficit from front-month to back. Position traders who roll forward have to eat the loss... there is no way around it other than using option positions (legged into) to offset some loss. So... moral of the story? There is no way to completely close the spread between one month to the next. Hope this helps! Austin
There is no other way to rollover a future contract except by closing the old contract and opening the next one.