Author Topic: Rollover of currency hedge  (Read 1009 times)

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Offline Shirley

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Rollover of currency hedge
« on: 27/01/2018, 03:04:15 PM »
I opened a currency hedge with Saxo on 15/12/17 with the AUDUSD March 18 contract (when I previously picked a longer contract I had numerous issues with Saxo).  Expiry date of contract is 14th March.

I have searched the Saxo website but cannot locate instructions as to what action to take on or prior to contract expiry.   

Does any other Saxo user know if the contract will automatically rollover or will I manually have to roll the contract over?  If I have to do it manually how do I do it?


Offline Dave McCulloch

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Re: Rollover of currency hedge
« Reply #1 on: 30/01/2018, 05:17:36 PM »
Hi Shirley,

Thanks for your question.

Saxo do not automatically roll over futures contracts. It must be done manually.

As expiry time approaches liquidity may start to dry up and this can result in the spread widening. It's best to close the position about a week before expiry to avoid those issues.

In terms of liquidity, the near month is generally best. That would be the next expiring contract after the one you're closing out of.

To do that, all you need to do is close your current position, and then open a new position for the same value in a new contract with a new expiry.

So, as an example if you were currently long one March 18 AUD futures contract, then you would close (sell) that position, and then open (buy) one April AUD futures contract. (Assuming April is the next front month contract)

I hope that make sense.