11.11What is rollover?
1What is it?
Rollover means closing a futures position in the expiring month and opening the same position in the next month.
2Why does it exist?
It lets traders keep a position beyond expiry. The price difference between months (the rollover cost or spread) reflects interest cost.
3Calculation
- Long NOV fut at 25,050 near expiry; DEC fut at 25,200.
- Sell NOV, buy DEC: you pay ~150 points more (≈ ₹9,750 per lot) for one more month.
Rollover cost ≈ 0.6% for a month (illustrative).
4Quick revision
- Close near-month, open next month.
- Costs the spread.
- Rollover data shows trader positioning.
5Knowledge check
Q1. Why roll over?Show answer
To keep a position beyond the current expiry.
Q2. What causes the next-month premium?Show answer
Mainly cost of carry (interest).
Q3. Is rollover free?Show answer
No, there is a spread plus charges.