Contracts for Difference - CFDs Expiration and Rollover Procedure Sample Clauses

Contracts for Difference - CFDs Expiration and Rollover Procedure. Contracts for Difference (CFD) is an arrangement made in financial derivatives trading where the differences in the settlement between the open and closing trade process are cash-settled. There is no delivery of physical goods or securities with CFDs, whose value is linked to an underlying Futures asset with expiration date or maturity. Contracts for Difference can be likened to futures which can be entered into in relation to Commodities or the FTSE-100 index or any other index or share, as well as Currency. However, unlike other futures and options, these contracts can only be settled in cash. Investing in a CFD carries risks like investing in a future or an option and you should be aware of these. Transactions in CFDs may also involve a contingent liability and you should be aware of the implications of this as set out in clause 8 below. Futures are derivative financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and set price. Futures—also called futures contracts—allow traders to lock in the price of the underlying asset or commodity. These contracts have expiration dates and set prices that are known upfront. In normal trading, when Futures Contract reaches its Expiration date, all contracts of the quoted underlying month will be closed, and all open positions will be liquidated as soon as the contracts reached its Maturity. To provide CFDs trading without interruptions and to avoid an obligation to close any position by the Customers, CMTrading introduces generic and continuous CFD’s of same underlying Futures but without closure, yet the Expiration will be handled automatically via the Trading Platform by adjusting the Customer’s account balance without interrupting any of the open positions. This adjustment known as CFD Rollover Charge: Example of change from Expiring CFD to Generic CFD: CL-AUG21 □ [why this sign?] Crude Oil NASDQ-SEP21 □ USTECH100 DOW-SEP21 □ US30 Full list of new generic instrument is presented on the site in the following link: xxxxx://xxx.xxxxxxxxx.xxx/cfd-trading/cfds-expirations Up to 3 days prior to the official expiration date (Maturity), Accounts with Open Positions of the Expiring underlying Futures instrument will be adjusted to ensure Clients do not Gain/Loss due to the difference in price between Old and New Contracts. Clients will incur costs in relation to the Spread Cost in closing Old Contract and opening New Contract. Information about upcoming...