DErivatives questions

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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Derivatives Discuss Futures & Options in securities whose value is derived from an underlying instrument.


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  #21  
Old 20th June 2007, 05:58 PM
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Default Re: DErivatives questions



Quote:
Originally Posted by uasish View Post
1) It is you yourself buying next series & closing this series,it can be in options also.(Time Decay is to be onsidered).If i dont ,then exchange will sq off .(That is the reason on last thursday's last half hr's avg price is taken as close price)
2) Like all transactions.
3) Till you are not tired.

NB : the last thursday the underlying price in cash mkt & it's derivative price is almost exact at closing.
Thanks Ashish.
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  #22  
Old 20th June 2007, 06:19 PM
J_D J_D is offline
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Default Re: DErivatives questions

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  
Old 20th June 2007, 08:10 PM
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Default Re: DErivatives questions

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  
Old 20th June 2007, 09:14 PM
J_D J_D is offline
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Default Re: DErivatives questions

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  
Old 30th June 2007, 10:48 PM
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Default Re: DErivatives questions

Quote:
Originally Posted by J_D View Post
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?
Rollovers dont take Options into Accounts. Its only Futures. If you close out current month future and open next month contract, you have rolled over.

Cheers

DT
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