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Rollover

In trading, rollover refers to the process of extending the settlement date of an open position to the next trading day. This involves closing the existing position at the end of the trading day and opening a new position for the following trading day.


Rollover is commonly used in forex trading, where trades are settled on a T+2 basis (two trading days after the trade date). If a trader holds a position beyond the end of the trading day, the position will be automatically rolled over to the next trading day.


Rollover can have an impact on a trader's profit or loss, as the rollover rate is based on the interest rate differential between the two currencies in a currency pair. If a trader holds a long position in a currency with a higher interest rate than the currency they are shorting, they will earn interest on the position. Conversely, if a trader holds a short position in a currency with a higher interest rate than the currency they are buying, they will pay interest on the position.


Overall, rollover is an important concept in trading and is used to extend open positions to the next trading day.

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