How to Rollover Futures Contract in Zerodha? — Clueless 2021
Future and option trading is full of doubts for people who just started trading in the stock market though Zerodha. After entering a future position, the next thing that comes to your mind if you wish to continue with your position is how to rollover futures contract in Zerodha? Let’s discuss the process & related terms.
What is Rollover ?
Rollover is the process of shifting from a current expiry contract to a contract in a future period. This means closing your position in the contract that will expire in with the current expiry and creating a new position in future period’s expiry. However, A future contact has a limited life of three months.
How to Rollover Futures Contract in Zerodha?
Any future or option you purchase will have a specific date of expiry (last day until which you can trade that contract). So, for instance, you can just trade the Nifty 27 May future until May 27, 2021. What if you want to keep a nifty futures contract until June?
In this scenario, you must leave the Nifty May future and enter a new contact in the June future, which will be valid until June 24, 2021. Rolling over is the exercise of shifting your position from one month to the next. This rollover can be completed at any time until the market closes on May 27, 2021.
Example
If you purchased a Nifty February future at 11050 and the Nifty future is 11000 on February 20th, you will decide to roll over your place to March in order to maintain your nifty future purchase. So, you’ll essentially sell the Nifty February future and acquire the Nifty March future, which you can therefore keep until March 29th.
Charges
You must pay brokerage and fees when you sell the May futures and must pay brokerage and fees again when you purchase the June futures. The fees are equivalent to what you pay during a standard buy-and-sell activity.
How to use Rollover Data?
The findings from Rollover data show the market’s level of interest as it looks forward to the next month. Looking a little deeper could reveal takeaways in terms of the sectors and stocks that the market is observing. As a result, trader may predict in the upcoming expiry.
Originally published at https://profitmust.com on May 8, 2021.
