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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (7525)	1/12/2007 11:24:37 AM
From: TimF	Read Replies (1) \| Respond to of 33421

I think I misunderstood what was meant by expires at the end of the month. I ignored the "most current contracts" part of - "Oil-futures contracts expire every month. Investors holding the most current contracts have to buy new ones to replace them if they want to maintain their positions." Rereading it and picking up on what I ignored it makes a lot more sense. The article wasn't saying all contracts expire every month (which is what I though it said, and which is what seemed silly to me), but rather just that some contracts expire each month. Am I correct now? That's how options work, and futures working in a similar way makes sense to me. I suppose if oil futures investors wanted to stay invested long term they should buy longer term futures contracts. I can understand how buying each month and then rolling it over again and again could be expensive, although 2.5% a month still seems pricey for very large traders.