What does Rollover mean?

A rollover means to close the position of a contract that is about to expire in the current month and opening of a similar new position in another month’s contract. Rollover can only be done for futures and not for options.

Example:-

1. A Nifty futures contract is bought with an expiry date of 23rd January.
2. The trader thinks that nifty will continue to go up in February and wants to hold this position till then.
3. Since this position will expire on 23^rd January, the trader can exit the Nifty February futures contract and take a new position for Feb futures contract with an expiry date in February.