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| Discuss DErivatives questions at the Derivatives within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Originally Posted by uasish 1) It is you yourself buying next series & closing this ... |
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#21
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#22
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Thanks Asish for the reply... Pls clarifyfurther.. Let me say I have a IFCI 57.5 Call option for the June Series.. I am not sure whether I will be able to exercise the contract profitably this month for want of price movement.
In such a case rollover means I close this position at a loss (assuming price hovers around 49) and buy another call in July Series.. So effectively I create a new position by paying the relevant premium in the July series. Why this is called as rollover ? Since I am buying a new contract It will be again creation of open interest isnt it? what is the differentiator between the terminology rollover and creation of open interest? |
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#23
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You are right it is indeed fresh position ,but normally it is seen that upto last wk there is thin vol in next month & far month series but from last wk open interest of those month increases & current series starts decreasing signifying that the speculator is rolling over his positions of bullishness or bearishness on that counter even to next month series.
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#24
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Asish, So rollover is the term for the % of volume of positions created till the start of the new month and there after that the volume of new positions created in the new month can be termed as open interest.. Is my understanding right?
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#25
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Cheers DT |
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