How it works
Index, commodity, and bond CFDs typically reference a futures contract with a defined expiry. As expiry approaches, the broker rolls all open positions to the next listed contract. The CFD price is adjusted by the difference between the old and new contract prices (the basis) to keep the trader’s P&L economically unchanged. The trader sees a balance entry (positive or negative) reflecting the basis. Spot FX, individual stocks, and crypto CFDs do not have rollover events because there is no underlying futures contract.
Example
A trader is long 1 lot of a Crude Oil CFD priced at $80 referencing the front-month WTI future. The front contract expires this Friday; the next month trades at $80.40. On rollover, the broker closes the old position at $80 settlement and opens an equivalent long at $80.40 new contract. To preserve P&L, the trader’s account is credited $0.40 × 1,000 barrels = $400 (long the cheaper old, now long the more expensive new). Net economic exposure is unchanged; only the reference contract has shifted.
Why it matters
Rollover preserves continuous exposure but exposes the position to basis movement. Contango (new contract more expensive than old) erodes long positions over multiple rolls; backwardation rewards them. For long-term commodity exposure via CFDs, the cumulative roll cost in contango markets can dominate the directional P&L. Check the contract’s typical roll spread before holding through expiry. For short-term traders, rollover is transparent; for swing or position traders, it is a significant cost or yield depending on the underlying’s term structure.
