What is Plus500 Rollover function?

The Plus500 Rollover function (your capital is at risk) has to do with the expiry date of the CFD. Once the expiry date is reached, the contract will be automatically extended to the new date and the corresponding price. The Plus500.com rollover function extends the position, in honour of the new conditions. You are still able to close the cfd position before the expiry time. The price for the new contract is usually different from the previous one when a position is rolled over.  Plus500.com is unique in the cfd market, they are the only cfd broker to offer a rollover function for traders. Other brokers tend to close the position when the expiry date is met. More info on Plus500.com (your capital is at risk)

How does the rollover work?

Just like with binary options, rollovers give the trader a chance to keep a position open on expiry, when the position is suffering a loss. Or when the position is in a profit of course. This means that you either have the chance of improving the profit when you think the price of the asset is rising, or to limit the loss.

The rollover in Plus500.com CFD Service is an automatically system, unlike with binary options. After the expiry, the date and time of the new contract will be shown in the box.

Let me clarify this with an example. Keep in mind that the spread might be changed in the new contract.

what is plus500 rollover
The Plus500 Oil CFD is limited to a one month contract. After that timeframe, the Rollover is activated automatically. In this image you can see when the contract expires (Oct. 2016) and when the Rollover will be executed (Sept. 15 2016 at 10:45 PM).

Example of rollover adjustment calculation:
You hold a BUY position of 100 contracts of Oil.

Oil contract rates at the time of rollover:
Existing contract buy rate = €45.30
Existing contract sell rate = €45.25
New contract buy rate = €46.50
New contract sell rate = €46.45

Adjustments calculation:
Buy Rate Difference = [New contract sell rate] – [Existing contract sell rate] = €46.45 – €45.25 = €1.2
Buy Value Adjustment = – ([Amount of Contracts] * [Buy Rate Difference]) =
– (100 * €1.2) = – €120

Spread Adjustment = [Amount of Contracts] * [New Contract Spread] =
100 * (46.50€-46.45€) = €5
Buy Total Adjustment = [Buy Value Adjustment] – [Spread Adjustment] =
– €120 – €5 = – €125

 

Summarizing the Rollover function

When the position is rolled over to the new contract with the new conditions, your position is not closed automatically. In our example above you would receive €125. Your capital remains the same, excluded the payed spread of €5.

Calculating the above example for a Sell position
Sell Rate Difference = [New contract buy rate] – [Existing contract buy rate] = €46.50 – €45.30 = €1.2
Buy Value Adjustment = [Amount of Contracts] * [Sell Rate Difference] =
100 * €1.2 = €120
Spread Adjustment = [Amount of Contracts] * [New Contract Spread] =
100 * (46.50€-46.45€) = €5
Sell Total Adjustment = [Sell Value Adjustment] – [Spread Adjustment] =
$120 – €5 = €115

Gaining more time for an out of the money position for traders. That is the main reason for an rollover. But it might not always be wise to rollover such a position.

If you would like to test if the rollover function might be something for you, Plus500.com offers an unlimited demo trading account with €20,000 of virtual money. Simply open an account, no deposit or credit card is needed to do this. The demo account is not bound to any limits.

Check out for more info: Plus500.com

what is the plus500 rollover?