What is rollover?

<p id="isPasted">It means carrying forward your future positions by closing your positions near the expiry date and reopening the same position in a future month. The process of carrying forward your position from one month to the next is known as rolling over. Traders can either enter into a similar contract expiring at a future date or let their position lapse on the expiry date. Rollovers are common in options, but not in futures. The trading occurs in forwarding or futures, where futures are referred to as promises and options as rights.&nbsp;</p><p>Typically, rollover is expressed as a percentage of total positions. Standard benchmarks do not exist for rollovers. However, they are compared based on historical data, mainly the trailing three-month average. Rollover is an indicator that traders are eager to carry forward their bets on the market. Nevertheless, it won't be possible to tell exactly where traders are betting on.</p>

<p>The concept of rollover is simply switching from a front-month contract nearing expiration to another one in a further-out month, which is like carrying forward your future positions. It means closing the contract about to expire and opening a similar position in a contract further out.</p>

<p id="isPasted">A rollover is the extension of a position's expiration date. Forex uses the term to describe the possible interest earned or incurred for holding a position overnight. In finance, rollover has a variety of meanings.</p><p>Generally, a rollover refers to extending the due date of a loan, which usually incurs an additional fee. A new due date will likely mean an increased borrowing cost, making it more expensive to repay the loan when its new due date is reached.&nbsp;</p>

<p>In forex trading, a rollover is a process of extending the settlement date of an open position by rolling it over to the next available delivery date. This is done to avoid the delivery of the currency or financial instrument underlying the position and to continue holding the position. Rollovers are typically conducted at the end of the trading day when the settlement date of the position is reached.</p><p>The rollover process involves the closing of the current position at the end of the day, and the simultaneous opening of a new position with the same size and at the same price as the original position, but with a new settlement date. This results in a transfer of the position from the current delivery date to the next available delivery date. The rollover process involves the settlement of any difference in the interest rates between the two currencies involved in the trade, and this difference is either credited or debited to the trader's account.</p><p>Rollovers are an essential aspect of forex trading, as they allow traders to hold positions for longer periods of time, and to take advantage of any changes in the exchange rate that may occur during that time. However, rollovers can also involve additional costs, as traders may be required to pay interest on the positions they hold overnight. It is important for traders to understand the rollover process and the potential costs and benefits of rolling over positions, in order to make informed trading decisions.</p>

<p id="isPasted">A rollover in forex is the action of keeping your position open from one trading day to the next, hence the name “rolling over.”. In a rollover, you technically close your position at the end of the trading day and re-enter the trade at the new open rate. This usually happens automatically.</p><p>In the forex market, which is open 24 hours 5 days a week, rollover occurs at the close of the New York trading session—5 pm ET. Rollover rates are multiplied by three on Wednesdays to make up for the two days the market is closed.</p>