We offer a non-expiring CFDs market based on the front month (“spot”) futures price of the below listed instruments.
On the day of expiration of the futures market, we will:
1. Adjust the quote of the market by the difference between the last traded prices of the spot (front) month and the next month’s price (the spread).
2. Make a credit/debit adjustment to your ACCOUNTS with open positions based on the spread.
3. Adjust any working stop or limit orders based on the spread.
On 1 January, we quote 98.10 – 98.25 for the spot WTI market. This price is based on the current front month for WTI, which in this example is the February 2014 contract.
You decide to SELL 0.1 CFDs and hold your position open through the next month.
On 15 January, we switch from using the February 2014 quote to the March 2014 quote as the basis for the spot price, because the underlying February 2014 futures market expires on 16 January.
The last traded prices of the underlying NYMEX futures contract for the spot month are 98.00 (Feb) and for the next month 96.62 (March.) so our price is adjusted down by 138 pips.
Your open position is adjusted by 138 pips (+138 for long positions, -138 for short positions.) In this example, the ACCOUNT will be debited (1.38*1000*0.1) = $138.
In other words, because the spot quote dropped by 138 , your ACCOUNT would be debited the equivalent of 138 pips to adjust for the change in quote. If the quote had risen by 138 pips, you would be credited the equivalent of 138 pips. This happens each month when the new quote is issued