Hello
My question is how do you decide which forward contract to rollover, given that you want to hold the position for the very long term (months/years), and specifically for contracts (like Oil now)that are in contango. My simple perspective is to take the far contract to reduce commission costs for rolling over. However the far contracts may have higher premiums for contracts in contango. Is there a formula or criteria for selecting the best contract for rolling over in this siutation?
Thank you for any suggestions
Kurb
My question is how do you decide which forward contract to rollover, given that you want to hold the position for the very long term (months/years), and specifically for contracts (like Oil now)that are in contango. My simple perspective is to take the far contract to reduce commission costs for rolling over. However the far contracts may have higher premiums for contracts in contango. Is there a formula or criteria for selecting the best contract for rolling over in this siutation?
Thank you for any suggestions
Kurb
