The practice of closing a position nearing expiry and opening a similar position in a later expiry contract.
Rollover refers to closing out a futures or options position that is close to expiry and simultaneously opening an equivalent position in a contract with a later expiry date, allowing the trader to maintain market exposure without taking delivery or settlement. Rollovers are commonly tracked around monthly expiry as an indicator of how much conviction traders have in carrying their current positions forward, and the cost of rolling reflects the difference in pricing between the near and far month contracts.
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