One position ends; another begins
A futures contract expires. A participant seeking continuing silver exposure may close the nearer contract and open a later delivery month, a process called rolling. For a long position, that typically means selling the existing contract and buying the later one. A short position reverses those directions. CME explains that offsetting and rolling are alternatives to holding a contract through its settlement process. Check the relevant contract calendar and broker requirements.
The curve changes the comparison
Different delivery months can trade at different prices. In a market in contango, later delivery may be dearer than nearer delivery; in backwardation, the relationship is reversed. Financing, storage and the usefulness of holding physical inventory help explain these relationships. The curve can also change. Looking only at a continuous front-month chart can conceal the fact that an actual position has moved between distinct contracts with distinct prices.
A price gap is not a cash bill
Suppose the later contract is quoted above the expiring one. That difference alone is not an immediate cash loss equal to the gap: opening a futures position does not involve paying its full notional value. Closing the old contract realises its accumulated profit or loss. Subsequent changes in the new contract, including convergence and changes in the curve, influence the continuing result. Spreads, commissions and execution still create real costs.
Follow the complete return path
A futures-based fund or strategy may therefore perform differently from spot silver. Its contract selection, roll schedule, collateral arrangements and fees matter alongside the metal’s price movement. Neither contango nor backwardation, considered alone, guarantees a particular future return. Compare like with like: a spot quotation, a single contract and a rolling strategy answer different questions. A roll maintains exposure; it does not remove price risk or the need to manage expiry.
Sources & further reading
- CME Group — Understanding Futures Expiration & Contract Roll ↗
- CME Group — Managing Contract Expiration ↗
- CME Group — What Is Contango and Backwardation? ↗
Sources checked 14 November 2026. Reference organisations do not endorse this website. Price examples are hypothetical and educational.