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What does Rollover mean?
What does Rollover mean ?
Rollover, or rolling over a contract, refers to the practice of carrying forward a futures position by closing the position in the expiring contract and initiating a new position of the same contract but with a future expiration month. It's important to note that rollover is applicable only to futures and not to options.
How can we Rollover At Tradejini
At Tradejini we offer an exclusive feature wherein the Rollover of futures position is done seamlessly without the headache of timing the purchase/sale in contracts of different month expiry. In normal case assuming a client is long in a futures contract with expiry of Jan and wants to carry forward this position to Feb expiry contract - he would first sell the existing Jan position at the ruling price and subsequently buys the Feb month contract at the ruling price. Here the difference between Jan contract selling and Feb contract buying will not be fixed or known before completing both the trades. The risk of movement of prices by the time both trades are completed can be sometime staggering and will lead to the client paying much more than the normal difference which is visible at the time of entering the first contract. To solve this exchanges have provided a contract which is basically a single contract encompassing both legs of the contract with the bid and ask being the amount of difference between the contracts. Tradejini provides this feature through its Desktop application "Cube" wherein after selecting NFO and the contract required he has to select the option type as "DS" to invoke this type of contracts. The contract nomenclature in itself provide both the months ie., Jan & Feb month. On execution of one contract 2 seprate transaction, one for sell of Jan contract and one buy of Feb contract is automatically done with the difference being the price at which the client executes the trade. This saves the client from the anxiety of execution of 2 legs separately and allows him to know exactly the difference he needs to pay or recieve before getting into the contract. Alternatively he can do the rollover manually through the mobile and web app "CubePlus" as stated in above as the Option type "DS" is not available here.
However, it's essential to be aware that according to SEBI, the rollover of contracts during the ban period is prohibited. Nevertheless, you are permitted to exit existing positions.
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