{"id":4149,"date":"2023-03-11T19:17:56","date_gmt":"2023-03-11T19:17:56","guid":{"rendered":"https:\/\/fisdomdevel.wpengine.com\/glossary\/rollover-option\/"},"modified":"2023-03-11T19:17:56","modified_gmt":"2023-03-11T19:17:56","slug":"rollover-option","status":"publish","type":"post","link":"https:\/\/www.fisdom.com\/glossary\/rollover-option\/","title":{"rendered":"Rollover Option"},"content":{"rendered":"<p>\nRollover option simply means switching from one contract, which is about to expire to another, similar contract with a later expiry date. It is a term used in stock trading, which means carrying forward of futures positions to the next settlement date. As futures and options contracts expire on the last Thursday of a month, \u2018rollover\u2019 gives the holder an option of closing the contract which is about to expire and re-opening a new, similar position in a next-month expiry contract.<\/p>\n<h2>What are the features of Rollover Option?<\/h2>\n<p>Key features of a Rollover Option are:<br \/>\n1.  Rollover option means closing the current month position and initiating a similar position for next month.<br \/>\n2.  Large institutions and big investors conduct most of the big rollovers as compared with individual traders.<br \/>\n3.  In a rollover option, the rolling price is not of much importance but the spread is quite meaningful.<\/p>\n<h2>What are the limitations of Rollover Option?<\/h2>\n<p>Rollover option has certain limitations like:<br \/>\n1.  In trading futures and options, leverage works both ways-it can multiply the profits manifold but the losses can also be huge<br \/>\n2.  Price fluctuations can cause losses<br \/>\n3.  Rolling over entails selling a contract and buying back another, which involves brokerage &amp; charges both the times<\/p>\n<h2><\/h2>\n<h2><\/h2>\n<h2><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Rollover option simply means switching from one contract, which is about to expire to another, similar contract with a later expiry date. It is a term used in stock trading, which means carrying forward of futures positions to the next settlement date. As futures and options contracts expire on the last Thursday of a month, [&hellip;]<\/p>\n","protected":false},"author":67,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[12],"tags":[],"class_list":["post-4149","post","type-post","status-publish","format-standard","hentry","category-mutual-funds"],"_links":{"self":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/comments?post=4149"}],"version-history":[{"count":0,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4149\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/media?parent=4149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/categories?post=4149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/tags?post=4149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}