# Continuous charts

**FUT-18 · Equity Index Futures · Core**

**Lesson question:** Which historical price was actually tradable?

Original fictional examples; educational writing, not live market data, orders or production approval.

## By the end

- Explain the mechanism in the lesson question.
- Reproduce the worked comparison and recognize its failure case.

**Prerequisites:** FUT-01

A continuous chart joins contracts into an analytical series. Back adjustment can remove roll gaps by shifting older history; unadjusted stitching preserves raw prices but leaves discontinuities. Neither is one contract that traded forever.

The chart methodology affects indicators and apparent reference levels.

## Understand the mechanism

Back-adjusted historical levels may differ from the prices printed by the actual contract at that date. Ratio adjustment has another effect. These methods can be useful, but their purpose must be declared.

Actual orders and reconstructible P/L require the real symbol, timestamp and quote.

## Walk through the process

Use known continuous-data methodology for historical analysis. Use actual contracts and explicit roll transactions for execution and performance. Include fees and avoid capturing a synthetic join as a tradable move.

Do not mix adjusted historical entries with unadjusted current exits in one profit calculation.

## Operational boundary

All figures are fictional teaching inputs, not current quotes or margin schedules. Product rules, broker requirements and usable liquidity remain separate from the model example. A planned exit and an algebraic hedge are not execution guarantees.

## A worked example

The near future ends at 5,000 and the next begins at 5,025. A raw stitch jumps 25. A simple back adjustment adds 25 to prior history, smoothing the join.

An old entry at 4,980 then displays as 5,005, but the actual account fill remains 4,980. The graph shows raw values; the text explains why changing the display does not rewrite cash history.

## Graph: Continuous charts—worked comparison

**Horizontal:** Contract history and roll stage  
**Vertical:** Raw contract quote

Fictional data from the written example. The chart organizes the comparison; its shape is not a forecast.

Complete numerical data are embedded in `scripts/equity-futures/FUT-18.js` and displayed as an accessible table in the HTML lesson.

## What would invalidate the reading?

A backtest can earn fictional rollover profits or use stop prices never quoted in the actual month if adjustment is ignored.

## Check your understanding

### Is every back-adjusted historical level an exact tradable price from that date?

**Answer:** No.

**Why:** Later adjustment may have shifted it.

### What is the critical failure to avoid?

**Answer:** A backtest can earn fictional rollover profits or use stop prices never quoted in the actual month if adjustment is ignored.

**Why:** Explain this risk before treating the example as a decision rule. A correct calculation does not guarantee a favorable market outcome. **Critical risk check.**

## Takeaway

Return to the question: Which historical price was actually tradable? State the observed facts, the assumptions and the failure condition separately.

## References and provenance

The cited references support definitions and conventions. The teaching prose, tickets and numerical scenarios are original; they are not attributed as historical market observations.

- [CME Introduction to Futures](https://www.cmegroup.com/education/courses/introduction-to-futures)

- [CME Micro E-mini overview](https://www.cmegroup.com/education/courses/micro-e-mini-futures/micro-e-mini-futures-products-overview)