Most traders discover they didn't truly understand rollover the hard way — they wake up to find their futures chart has gapped hundreds of points overnight, or their forex account has been debited a small fee they didn't expect. Neither event is random. Both follow precise, mechanical rules that, once understood, stop being surprises entirely.

Rollover means different things depending on whether you're trading futures or spot forex, but the underlying idea is the same: contracts and positions have a cost to carry through time, and the market has a structured way of accounting for that cost. Ignoring rollover mechanics is one of the most common reasons newer traders misread their performance history.

CONCEPTRollover is a scheduled, predictable event — every cent of it can be understood and planned for in advance.
WARNINGBacktesting on unadjusted futures data without accounting for rollover gaps will inflate or distort your strategy's apparent returns.
KEY IDEAIn forex, rollover is a daily interest credit or debit. In futures, it's a contract expiry you physically manage by switching to the next contract month.

Take ASX SPI 200 futures as a concrete example. The March contract expires in mid-March. On expiry day, the price of March contracts converges to the spot index level. A trader holding a March contract who wants continued exposure must sell March and buy June — the next active contract. The June contract typically trades at a different price to March, reflecting the cost of carrying that position three more months. That price difference is called the basis (the gap between the futures price and the underlying spot price). If March settled at 7,800 and June is trading at 7,815, your chart will show a 15-point jump at rollover that has nothing to do with the actual market moving.

Futures Rollover — Price Discontinuity0MarExpiryJunMarch contractJune contract+15 pt basis gap778578007815

Spot forex rollover works differently. There's no contract expiry — positions can stay open indefinitely. Instead, every day at 5:00 PM New York time, your broker applies a swap rate (also called the overnight rate or tom-next rate) to any open position. This rate reflects the interest rate differential between the two currencies in the pair. If you're long AUD/USD and Australian interest rates are higher than US rates, you typically receive a small credit. If the differential runs the other way, you pay a debit. This daily credit or debit is the forex rollover. Traders use this mechanic deliberately in a strategy known as the carry trade — borrowing in a low-rate currency to hold a higher-rate one — though exchange rate movements can easily dwarf the interest earned. For deeper background, the mechanics of futures expiry are well-documented at Investopedia's rollover explainer, the carry trade concept is covered thoroughly on Wikipedia's carry investment page, and the broader futures pricing framework is explained at Investopedia's futures overview.

Rollover isn't risk — it's structure. Learn its rhythm and it becomes invisible noise. Ignore it and it will quietly distort every trade you ever analyse.

This content is for educational purposes only and does not constitute financial product advice. Past performance is not indicative of future results. Profit Logic Ltd (ACN 688 669 936) accepts no responsibility for errors or omissions in this content or anywhere on this website. Always seek advice from a licensed financial adviser before making investment decisions.