Currency futures question regarding contract months

[FXTrend240]

If i plan to hold for a long period of time ( say 6 months) or whatever, does my position get rolled over to the next month or does the position close out altogether?

 

[Martinghoul]

By default, it doesn't roll... You actually have to trade the spread to roll the position. If you don't, the futures will mature.

 

[FXTrend240]

hmmm; what do you mean by trade the spread?

edit: what about continuous contracts?

 

[Martinghoul]

I mean sell the front month and buy the next one, if your original position was long; and vice versa.

 

[FXTrend240]

sorry i don't understand; wouldn't you just be hedging yourself then ?!?!

 

[Martinghoul]

OK, let's start from scratch. Let's say, very hypothetically, that you're long some April futures today. Tomorrow is the last trading day. As I understand it, you want to keep the long exposure to the underlying instrument into May and beyond. The only way to do that would be to sell the April futures you own and replace them with May futures. Does that make sense?

 

[FXTrend240]

thanks i get it now

 

[Rhody Trader]

edit: what about continuous contracts?

Continuous contracts is only a charting convention to create a continuous price series for longer-term charts.