Reasons for Futures Rollover

When you roll a futures contract, you are essentially prolonging the maturity or expiration of your initial position and using the same underlying position in order to start a new contract which can be held for a longer term. This way, the trader can retain their initial risk position even if the initial contract has passed its expiration date (this is important because a futures contract can only have limited expiration dates). The roll is usually executed shortly prior to the expiry of the original contract and after loss or gain on the initial contract is settled.

Confirm Controlling Orders

If the contract is physically delivered, the position needs to be closed out prior to the first notice day. However, in the case of cash-settled contracts, the closure needs to happen before the final trading day. Normally, contracts are closed through cash, with the investor simultaneously entering the same contract having a further-out expiration date.

Introduction

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The 8th of June saw meme stocks, such as Wendy’s, Clover Health, and AMC Entertainment, go up for a second consecutive day, thanks to the innuendos caused on social media that led to the Wall Street rumblings ever since the start of 2021.

Introduction

The universe of futures presents highly leveraged opportunities. However, if you are a trader considering futures trading, you should have a fundamental understanding of the process in which futures are taxed. In this article, we will be covering exactly that.

How are Futures Taxed?

Compared to equity traders, futures traders benefit from a more favorable treatment of taxes. According to section 1256 of the IRC (Internal Revenue Code), any futures contract traded on a U.S exchange, foreign currency contract, dealer equities option, dealer securities futures contract, or non-equity options contract are taxed at 60% long-term capital gains rates and 40% short-term capital gains rates (60/40) - regardless of how long the trade was actually held.

Even if you are relatively new to trading, there is a fair chance that someone has brought a Virtual Private Server (VPS) to your attention and that it is highly beneficial for trading. Even though a VPS is usually associated with website hosting, it does have several advantages when it comes to trading – stocks, futures and forex trading, in particular.

What is VPS?