roll over

In the forex market, rollover is the process of extending the settlement date of an open position by simultaneously closing the existing position at the daily close rate and re-entering the next trading day at the new opening rate. In all forex trades on a “spot” basis, a trader is required to take delivery of the currency two business days from inception. However, by rolling over the position, the trader artificially extends the settlement period by one day. Since spot forex is predominantly speculative in nature, traders seldom wish to actually take delivery of the currency. Trading platforms offer automatic rollovers, but the process involves a rollover interest fee, which is based on the interest rate differential of the two currencies. On a long position, the trader receives the interest rate, while on a short position, he is required to pay the interest rate.