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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
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Equity Futures rolls are a function of cost of carry to hold the position minus dividends received while holding the position. If the spread deviates from this value people will arbitrage it and take the free money.
While it is true that there is a roll cost, it's also true that the cost of carry for a future is a lot lower especially in this interest rate enviroment.
First of all thank you very much for putting this question and explaining the question in very much detail. Myself, also thought of the exactly same thing and trying to find the correct answer. But so far havent got any luck.
As far as my understanding, Now regarding interest rates, for the futures its already covered in the price of the futures contract. So we are not charged extra by the broker. And I am assuming it would be cheaper comapred to the interest rates charged by the broker for ETF of the same amount $$ value.
Still looking for many questions like roll over prices difference, pros and cons, whats the affect, do we need to do manually every quarter or not and all that stuff..
Please post it here if u find any. And I will surely post ehre, if I find any.
This question makes my blood pressure go up. I trade rty and emd and have for many years. I cannot imagine holding for an entire year. After covid's big dip I started trading the daily chart here and there and holding for some days at a time, up to about 2 weeks at most. I did not enjoy it. Waking up in the middle of the night, checking news, etc. I guess I am a day trader at heart.