How pricing on LBX works? A guide to synthetic instruments and non-expiring CFDs

At LBX, we aim to make trading as seamless and transparent as possible. One of the key features of our platform is providing CFDs based on synthetic instruments. This guide explains why our prices may occasionally differ from the quotes of other brokers or exchange-traded futures, and how this system works.

What are synthetic (non-expiring) instruments? 

Most indices, commodities (oil, gas, wheat), and metals are traded via futures contracts on global exchanges. A standard futures contract has an expiration date, namely a point when the contract closes, forcing the trader to either realize their result or manually reopen the position in a new contract (a process known as "rolling over").

We offer synthetic CFDs that do not have an expiration date, providing several practical benefits:

• No calendar tracking: You don't need to worry about when a contract expires.

• Long-term holding: You can hold a position on oil, gold, or indices for as long as you wish.

• Cost efficiency: You avoid the potential extra costs of closing and reopening trades every month.
  
  

Why might our prices differ? 

Because our instruments are synthetic and continuous, their price is derived from the underlying asset but includes internal adjustment mechanisms. This ensures a smooth price feed without the sharp gaps that usually occur when an exchange switches from one monthly futures contract to the next.

For example, you might notice that the price for Brent crude oil at another broker is $112, while on our platform it is $117. This price gap (basis) is normal and occurs due to the technical construction of a continuous, non-expiring chart.

Price correlation: what you need to know 

Despite the difference in absolute numbers, the price movement remains identical to the market:

• Correlation: If oil rises by 2% on the global market, our synthetic instrument will also rise by 2%.

• Technical analysis: All analytical tools (support/resistance levels, indicators, trends) remain effective. The charts will look the same; only the price scale is shifted.

• Profitability: You profit from the price change. If you buy an asset with us at 117 and it rises to 120, your profit is identical to buying at 112 with another broker and seeing it rise to 115.
  
  

Summing up

The price difference is a technical feature that allows for the convenience of trading without expiration. We manage the complexity of futures cycles behind the scenes, giving you a continuous chart to analyze without the headache of contract expiry. If you have questions regarding a specific instrument, our support team is available to provide more details.