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Market Intelligence › Basic Terminologies
Spread, cost of carry, and what to look at when rolling
Published by The Retail Trader · AUG 09, 2026 · Derivatives (F&O)
Taking a position to the next expiry is called rollover. It is two trades — the old one closed and the new one opened — and in between there is a cost that often goes uncounted.
The near-month and far-month prices differ, and that difference is called the spread. When rolling a long position, you often have to pay that difference.
On top of that come the charges of two trades and slippage twice. In a trade rolled every month, this adds up to a big number over the year.
These four things are worth checking:
• How large the spread is in percentage terms, not only in rupees.
• How the far month's liquidity is — if it is thin, the exit will be expensive too.
• Doing both legs together reduces the risk of being exposed on one side.
• Rolling on the last day of expiry is generally the most expensive.
Holding a view for a long time by rolling every month is a hidden monthly expense. The view has to be bigger than that expense — otherwise you are slowly losing even while being right.
This article is for education only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics change from time to time with the exchange, SEBI and RBI, so verify every number yourself with your broker or an official source.