Why Is 'Rolling' a Futures or Option Position a Common Practice in Long-Term Hedging? ⎊ Path

Why Is ‘Rolling’ a Futures or Option Position a Common Practice in Long-Term Hedging?

Rolling is common because it allows a trader to maintain a long-term hedge or exposure beyond the expiration date of the current contract. It involves simultaneously closing the expiring contract and opening a new contract with a later expiration date.

This ensures continuous protection or exposure without interruption.

How Does the Concept of ‘Cost of Carry’ Affect the Pricing of Long-Term Crypto Options?

What Is the Risk of “Gap Risk” When Rolling an Options Contract?

What Is the Concept of “Rolling the Hedge” and How Does It Relate to Basis Risk?

Define a ‘Protective Put’ Strategy for Hedging a Long Crypto Position.

What Is the Main Risk of Using Options to Hedge a Long-Term Position That Is Not Perfectly Correlated?

What Is the Difference between ‘Roll Yield’ and ‘Carry Cost’ in Futures?

How Is the Holding Period Affected by Rolling over a Futures Contract?

What Is the “Roll Yield” and How Is It Calculated?