Why do CFDs have an expiry date?

Hi Sophia,

A standard Contract for Difference, or CFD, automatically becomes terminated on a predetermined date. This process is referred to as the CFD expiry date. However, a CFD may contain a rollover option. This option lets you extend your contract.
In other words, a rolling daily CFD is an open-ended contract without an expiry date but rolled over automatically from a trading day to the next. This goes on until you terminate the contract. With this in context, and before you venture into opening a position in CFDs, ensure you determine whether the CFDs have expiry dates or whether they are rolling CFDs.
Make this determination because, should your choice have an expiry date, its position will close on that date. Closure would be regardless of whether its underlying asset value has lost, or gained, in relation to its position. Such a situation would not arise if you opted for rolling CFDs.