Can you explain the concept of rollover in relation to cryptocurrencies?

3 answers

• Satrio Rizq MauladitoNov 25, 2023 · 2 years ago
  Rollover in relation to cryptocurrencies refers to the process of extending the expiration date of a futures contract by closing the existing position and opening a new one with a later expiration date. This allows traders to maintain their exposure to the underlying asset without having to physically settle the contract. It is commonly used in cryptocurrency futures trading to avoid the need for physical delivery and to manage positions over longer timeframes. Rollover fees may apply when extending the contract, and the new contract's price may differ from the previous one due to market conditions and funding rates. In simple terms, rollover is like renewing a contract to continue trading the same asset without actually owning it. It gives traders the flexibility to hold their positions for a longer period and adjust their strategies based on market conditions. However, it's important to note that rollover involves additional costs and risks, such as potential price differences and funding rates, which traders should consider before deciding to roll over their positions.
  1089

  545
• Neeraj ChauhanSep 20, 2021 · 4 years ago
  Rollover in relation to cryptocurrencies is a mechanism that allows traders to extend the expiration date of their futures contracts without physically settling them. Instead of closing the existing position and opening a new one, traders can simply roll over their contracts to a later expiration date. This is particularly useful for traders who want to maintain their exposure to the underlying cryptocurrency asset over a longer period. However, it's important to note that rollover fees and potential price differences between the old and new contracts can impact the overall profitability of the trade. Traders should carefully consider these factors before deciding to roll over their positions.
  702

  234
• HABAKURAMA RoiFeb 15, 2022 · 4 years ago
  When it comes to cryptocurrencies, rollover refers to the process of extending the expiration date of a futures contract without physically settling it. Instead of closing the existing position and opening a new one, traders can roll over their contracts to a later date. This allows them to maintain their exposure to the underlying cryptocurrency asset without the need for physical delivery. Rollover is commonly used by traders who want to hold their positions for a longer period and adjust their strategies based on market conditions. However, it's important to be aware of the potential costs and risks associated with rollover, such as rollover fees and price differences between the old and new contracts.
  714

  179