FTSE 100 March question.

[heatseeker]

Hello all,

I'm a total beginner and have just bought "FTSE 100 March" on Capitalspreads. Will my position automatically be closed at the end of February? Will i be able to "extend" it?

The reason I have bought March vs daily Rolling was that I wouldn't have to pay any daily fees to keep the position open. Is that the real benefit are there any more and also disadvantages?

Your reply is greatly appreciated. Thank you.

 

[Jack o'Clubs]

Spreadbetting quarterlies are usually based off the underlying future, so my guess is that the IG future will expire on 18th March, although the info tab on the particular market you've bought will have the details. Unless you've bought the 'daily future' which if IIRC is a daily market from IG based on the quarterly future and you get stung for a rollover each day (although I guess the spread is tighter intra-day). I think you'll need to manually roll-over the quarterly into June as it's a different underlying but again the info tab will tell you the details. Without wanting to sound patronising, isn't it a good idea to check this stuff before you open your bet?

 

[heatseeker]

Thanks a lot for your reply Jack o'Clubs. I actually meant to say Capitalspreads instead of IG index (I've corrected my post now). See how much of a beginner I am.

You're right. I should've checked before jumping in, but you know how it is with laziness and greed.

The Daily's financing made me jump to quarterly futures instead as I'm still learning but I was afraid that my position would automatically be closed out when the time was up. But you've now enlightened me that it can be rolled over and of course with a financing fee. Thanks again for your help.

I've just checked and it expires on 18 March on Capitalspreads too. So am I right in saying that if my position is still open at the expiry on 18 March it will automatically be rolled over to the next quarterly (June) and and a financing fee be charged? Instead of the position being automatically closed.

Thanks ever so much again.

 

[Jack o'Clubs]

I can't answer for Capitalspeads as I've never used them, but with IG it will roll-over into the next market and I think they give you a discount on the new spread - but you have to set up rollover instructions in your preferences tab, otherwise it will just be closed. You need to check with CS what they do, or check the platform for options to set rollover as the default (if that's what you want).

 

[heatseeker]

Thanks muchly for your speedy reply again. I can feel my blood pressure coming down a litte with each reply. hehe.

Capitalspreads doesn't appear to have any visible options/checkboxes for rolling over so I'll be on the phone as soon as they're open tomorrow to set things right.

Thanks a lot and have a good evening.

 

[tomorton]

Expiry of Caps March FTSE seems to be 10:00am on the third Friday in March. They say that, obviously, the position can be closed at any time before expiry but I don't see any mention of rolling over a future position like this.

 

[mcclaine]

Thanks muchly for your speedy reply again. I can feel my blood pressure coming down a litte with each reply. hehe.

Capitalspreads doesn't appear to have any visible options/checkboxes for rolling over so I'll be on the phone as soon as they're open tomorrow to set things right.

Thanks a lot and have a good evening.

Hi, I would note that, technically, the closing price of the bet rolled over and the opening price of the new bet need not be the same, i.e. effectively they are 2 different bets on two different underlying futures contracts and the rollover is simply an administrative process of moving seamlessly from one bet to the other.

This sometimes leads to a few odd results. For instance, if you went long the current bet at $90, the closing price of the current bet is $100 and the opening price of the new bet is $110, although the price of the commodity has moved from $90 to $110, you won't see a $20 gain, only a $10 gain (and, of course there are scenarios where it could exacerbate or crystallise an unwarranted loss as well).

I will caveat this as follows - I know this is true for monthly/quarterly bets on commodities at most spread betting houses, I am not sure about other products though (such as the FTSE 100 index that you have traded).

All the best.

 

[heatseeker]

Hi people, I got my response from Capitalspreads about my FTSE 100 March position. They are not automatically rolled over however rollover requests can be made by phone at least half and hour before the expiry date.

Thanks Mcclaine, I will brace myself in case such an event does take place.

 

[heatseeker]

Tomorton, you're correct the UK 100 March expires 10AM on 18th March. Thanks.

 

[tomorton]

I didn't know about rolling the monthlies over though. Interesting policy they have. Cheers.

 

[heatseeker]

Just thought I'd update this thread after making my first ever Quarterly rollover today. My account was with CS for clarity just in case it varies among providers.

So here's my opinion of doing a rollover, it's a lazy way to continue your position and I wouldn't recommend it unless you really can't afford the time to identify a new entry point because basically what happens when you request for a roll over is your current position is closed by the provider and your profit/loss is realised then a new position is simultaneously opened at the market price. I hope this helps. All the best.