What Do CFD Expiry, Rollover and Cash Adjustments Mean?

A CFD (contract for difference) is generally settled by reference to the difference in an agreed price, but whether it expires, how an open position is rolled and how corporate actions are handled depend on the product and provider terms. Commodity, index or futures-based CFDs may reference an underlying contract with a fixed term; some share or rolling-spot CFDs may have no fixed futures expiry but can still incur holding costs or adjustments.

What Does Expiry Mean?

Expiry is the time when a contract ends or is finally settled under its terms. If a CFD references a futures contract with an expiry, the provider may specify automatic closure, cash settlement at a reference price or another procedure. Do not assume that every CFD can be held indefinitely, or apply an underlying future's expiry rules directly to a platform contract.

How Does Rollover Work?

Rollover generally transfers exposure from a contract nearing expiry to a later month or a new reference contract. A provider may adjust quotes and positions automatically, or first close the old contract and open a new one; check the product documentation for the actual method. Different prices for the old and new months can create a rollover spread. This affects the account's position performance but should not simply be treated as extra profit or loss. Rollover may also change spreads, fees, margin and pending-order handling.

What Is a Cash Adjustment?

A cash adjustment is an amount credited to or debited from an account by the provider to reflect an underlying-market event or contract event. It may relate to dividends, a contract roll or another corporate action. The direction and calculation depend on the product, position direction, tax treatment and contract terms. It is not compensation for a loss and may not be identical to the cash flow on the underlying asset.

For example, if a CFD referencing a future is held through a contract-month change, the platform may update its quote to the new reference contract and make a corresponding adjustment. The price difference between months in the same commodity affects the result. If an investor looks only at a continuous chart and ignores the rollover method, actual profit and loss may be misread. Providers may handle the same market differently.

Items to Check Carefully

• Whether the contract has an expiry date, last trading time and automatic-close arrangements.
• Whether rollover is automatic or manual, how the new reference contract is selected and how the price difference is calculated.
• Spreads, financing, margin and pending-order handling during rollover.
• Cash-adjustment trigger events, formulas, posting times and applicable taxes.
• Check the product specifications and account statement to confirm that actual adjustments match the terms.

CFD rules differ by contract and provider; use the latest documents. This article is for financial education only and is not investment advice.