If you are long a futures contract that comes near to expire, you have two options:
- Offset the position or rollover the contract
- You have to take delivery of the underlying commodity
For example, you are long/buy a crude oil futures contract in March at the spot price of $100 which expires in June. Then the day before they expire, the spot price of the June contract is $70.
- If you offset the position, you will have to sell the contract which makes you lose $30.
- If you rollover, you will sell the June contract and buy a July contract. Does it means that you also lose $30 when you rollover? If right, then what differences between these two options since they have the same loss?
I'm sorry if this question is stupid to you, I am new in trading so I am confused a lot. Thank you so much for your help in advance!