As a futures trader, it is crucial to stay informed about contract expiration and the rollover process to effectively manage market exposure and prevent the need to take delivery or settle contracts in cash. Typically, contracts expire in March, June, September, and December, highlighting the importance of preparedness for rollovers during these months.
Step 1: Mark Your Calendar
First, make sure you’re ready for the turnover by marking your calendar with the expiration dates of the futures contracts you trade. While most futures markets have contract expirations in March, June, September, and December, it’s crucial to verify the specific dates for each contract. You can find this information on the exchange’s contract specification page or by checking the instrument’s details in the NinjaTrader platform.
Step 2: Monitor Trading Volume and Liquidity
It is important to monitor the trading volume and liquidity of both the current and upcoming contracts as the expiration date approaches. It is advisable to consider rolling over to the next contract when its volume surpasses that of the current one. This will ensure that you trade in a liquid market, minimizing any potential price slippage that may arise from illiquid markets.
Step 3: Rollover the Contract in NinjaTrader
Follow these steps to rollover your futures contract in NinjaTrader:
- Open the NinjaTrader platform and go to the Control Center.
- Click on Tools and then select Instrument Manager.
- In the Instrument Manager, search for the futures contract you want to roll over.
- Select the contract and click on the Rollover button at the bottom of the Instrument Manager window.
- A new window will open, displaying the available contracts for rollover. Select the contract with the next expiration date and click OK.
- NinjaTrader will now update your charts, orders, and positions to the new contract.
Step 4: Manage Open Orders and Positions
It’s important to manage your open orders and positions after rolling over the contract. Make sure to update them to reflect the new contract, which may involve adjusting your stop-loss and take-profit orders. Additionally, you should update your position sizing to account for any changes in contract value or margin requirements.
Step 5: Stay Informed and Prepared
It is crucial to stay informed about the approaching rollover dates and any adjustments in contract specifications that might impact your trading strategy. You should also consider setting reminders for yourself to keep an eye on trading volume and liquidity as the expiration date draws near, ensuring a seamless transition throughout the rollover process.
It is essential for futures traders who use the NinjaTrader platform to be well-prepared for quarterly rollovers. By carefully following the step-by-step guide, traders can ensure a smooth transition between expiring contracts and maintain their exposure to the underlying asset without any interruptions.
It’s important to keep track of trading volume and liquidity as the expiration date of futures contracts approaches. Make sure to stay informed about the contract specifications of the contracts you trade. With the right preparation and execution, rolling over futures contracts in NinjaTrader can be a seamless and uncomplicated process.