Question about futures brokers with continuous contracts

Discussion in 'Trading' started by 1a2b3cppp, May 20, 2011.

  1. Is there a rollover fee or anything?

    I'm considering the implications of using ES instead of SPY, but I sometimes hold positions for long periods of time and with OEC, I don't feel like selling my current contract and buying the new one.

    So with a continuous contracts broker can you really just hold it indefinitely?
  2. rmorse

    rmorse Sponsor

    There must be a similar cost somewhere. No one provides a service for free.
  3. emg


    when u enter the market, commission and fees deducted. when u exit the market, commission and fees deducted.

    During the rollover, u will have to exit your postion (commission and fees deducted) and then enter a new postiion new month (commission and fees deducted).
  4. I feel like you don't understand what a continuous contract is.
  5. rmorse

    rmorse Sponsor

    I know I don't. But anyone that takes the time, effort and capital to create an asset class, they are doing it to get paid. For example, the GLD etf charges around 50bps per year to create this product. So, over time, it must lose value to the front month future and the cash market.

    How are continuous contracts diffferent?
  6. emg


    where is the continuous contract in the futures market? what futures market has continous contract??

    Index, interest rate, grain, energy, metals, soft, meats, currency futures/commodity markets?

    Lets begin with Index: ES Emini S&P 500

    front month is june es. june es expires on june 17th
    sept es. sept es expires on sept 16th
    dec es. dec es expires on dec 16th

    where is the continuous contract in es????
  7. Continuous contracts are only for charting purposes.

    There is no actual ES #F contract being traded. That's esignal's, TS, etc. way of giving you the option to use 1 chart for the contract -- HOWEVER actual trades are placed on actual contracts.

    So at rollover time, you must liquidate your contract that is expiring and purchase/sell the next contract you want.


    The CL M contract expires today. If you were long/short CL M, you must get out of the position no later than today and purchase/sell CL N contract - even though the entire time your charts may read CL #F.

    I mainly focus on oil so easier to use that as an example for me but the idea is the same regardless of what contract being traded. Only difference is how often you have to roll. Oil is monthly, indexes quarterly.
  8. olias


    I don't know of any broker that would roll over your futures contract for you. I think you would have to manually roll over the position, or at least give direction to your broker to roll the position over. Either way, the process is basically the same. It requires two new transactions---closing out the one, and opening the same position in the new month.
  9. rmorse

    rmorse Sponsor

    I'm not a futures expert, but I believe there are live electronic markets for the monthly spreads. You can enter one order and not have legging risk. You would bid/offer for the difference between the too.
  10. emg


    who will pay for the exchange/clearing and nfa fees?
    #10     May 20, 2011