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Quarterly Rollover cost


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I got an email that Quarterly rollovers will no longer include concessions.  I will like to get a clearer idea and some detailed breakdown of the total cost of rolling over positions per quarter, assuming that 3 months libor is 0.40%.  

 

Also, is it possible to roll over into more distant quarters i.e 6 months, instead of 3 months?

 

Many thanks

 

 

 

 

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Hi ,

 

You are correct, recently a business decision has been made to no longer rollover quarterly share contracts with a spread concession.

 

Instead your position will be closed at the bid/offer (depending if Long or Short) of the current quarterly contract you hold, and at the same time you will be opened in the next quarterly contract at the bid/offer (again depending if Long or Short).

 

As an example:

 

If you hold a long position on a stock in the SEP17 contract and wish to roll this over into the DEC17 the below would happen.

 

SEP17 price: 100 / 101

DEC17 price: 99.5 / 101.5

 

Your SEP17 position will be closed at a price of 100 and at the same time you will be opened long in the DEC17 at a price of 101.5.

 

To answer your second question, yes, you can roll to a further quarterly contract but you would need to call us to request this. For example, you could roll from SEP17 to MAR18.

 

In terms of the interest cost, our Forward quarterly contracts have interest priced in, this is why you see a wider spread.

 

In order to set automatic rollover instructions all you need to do is go to My IG > Settings > Rollovers.

 

Thanks,

MichaelC

 

 

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  • 2 weeks later...

This is disappointing. This 'concession' has existed for a such a long time that there is a tacit understanding that it forms a defacto function of the platform, yet we are advised it is being withdrawn at short notice without explanation.

 

Given that it relates to quarterly (or longer) positions it would have been an appropriate courtesy to give at least 3 months notice of a 'change of terms' to enable users to consider how to best manage their roll-over positions.

 

The lack of explanation suggests that there really isn't one which is justifiable.

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