Rollover (finance)

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This article is about a type of financial transaction. For other uses, see Rollover (disambiguation).
See also: Refinancing

In foreign exchange trading (FX), a rollover is the action taking place at end of day, where all open positions with value date equals SPOT, will be rolled over to the next business day. This happens since in FX trading the trader doesn't want to actually buy the traded currencies but to continue to trade until position is closed.

For example, on Monday all position with value date of Wednesday (in case of T+1) will be rolled over and the value date will be updated for Thursday. Position with value date of Friday will be updated with value date of next Monday.

Trading platforms offer rollovers but the process involves a rollover interest fee which is calculated according to the difference between the interest rates of the traded currencies. On the long position, the trader get the interest rate and on short position she needs to pay the interest rate. In case of weekends and holidays, the rollover is multiplied by the number of days of rollover.

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