How are the rollover fees on Oil and Natural Gas calculated?

eToro offers Spot CFD pricing on Oil and Natural Gas to enable you to open positions that are not subject to a contract that expires.

The price of the Spot CFD is derived from the two upcoming Futures contracts on the underlying commodity. The Future contract with the closest expiry date is called the Front. The Future contract with the second-closest expiry date is called the Next. As soon as the previous contract expires, the price we offer is equal to the Front month contract. When the Front month contract expires, the Next month contract becomes the Front month contract.

In between these two expiry points, the price gradually moves along a curve from the Front price to the Next price, regardless of market forces. In order to offset the profit or loss made from this movement, the overnight fee eToro applies on Oil and Natural Gas contains an adjustment which credits or debits one day’s movement along the curve.

 

As of 22 February 2019, the rollover (overnight) fees on new and open spot energy (Oil and Natural Gas) positions are as follows*:

For BUY (long) positions:
- {[(2.5% * Price) / 365] + [1/NumDays * (Next – Front)]} * Units


For SELL (short) positions:
- {[(2.5% * Price) / 365] – [1/NumDays * (Next – Front)]} * Units
 

Where:

  • The annual markup is divided by 365 to reflect the daily markup
  • NumDays: The number of days between the expiration dates of the current (front) and the next contract
  • Next: Oil price on next contract
  • Front: Oil price on current (front) contract
  • Units: The number of units within the position

 

*The explanation above corresponds to an upward sloping futures curve. On a downward sloping curve, fees for BUY and SELL are reversed.

For a more detailed explanation of how fees are calculated on eToro, please refer to this blog post. Our full list of fees can be found on our website.