June Contracts-Futures

[elsaQ]

Hi

I trade the YM & ES via IB on an intraday basis.

I would like to trial a longer time frame strategy which would involve holding positions for a period of weeks. I'm unclear about what happens at the end of the contract. Will IB terminate any open positions for eg at the end of the June contract?

If so, what alternatives are there for me for longer term positions?

Any help appreciated.

Elsa

 

[idetkov]

You can rollover these futures a week before the expiration. Rollover means selling June and buying September contracts. A week is a standard period for GLOBEX index futures.

 

[Directional]

index futures are generally settled in cash - this means that if you held say a May or June future contract to expiry, the difference between the index future and the cash index is what your account would be debited or credited with. Most people do not hold trades till expiry, and your broker may charge you a premium for settling the expired trade.

Do NOT hold any non-cash settled futures to expiry, unless you want to take delivery of say 1000 barrels of oil on your front lawn.

If you want to play longer term positional trades, suggest you trade further out futures - ES and YM trade two simultanous contracts - currently this is June and September contracts. If you really think you'd still be in your position cum June then you might want to look at the back month. the downside of this approach is that the further out month may be illiquid and you may just want to "roll over" your trade when June expires, as idetkov suggests above.