Rollover
Closing a derivative position in the expiring contract and opening the equivalent position in the next expiry.
Formula
Rollover Cost = Price of the Far Contract - Price of the Near Contract, per unit
Unit
index points
In depth
Rolling is how a derivative position is maintained beyond a single expiry, and it costs the spread between the two contracts plus two sets of transaction charges. Rollover percentage, widely reported in India during expiry week, measures how much open interest moved to the next series and is treated as a positioning indicator — an interpretation this dictionary reports without endorsing, since the data does not reveal who initiated. The cost compounds: a position held for a year through monthly rolls pays twelve spreads. In contango those spreads are a persistent drag, which is the main reason long-term exposure through futures underperforms holding the asset.
Worked example
Rolling from a near contract at 24,138 to a far one at 24,280 costs 142 points, or ₹10,650 per lot. Twelve monthly rolls at that cost total about ₹1,27,800 against a contract value of ₹18,00,000 — roughly 7% a year.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Rollover” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.