FX Rollovers

Rollover describes the process where the settlement of an open trade is rolled forward to another value date. In the Forex Market trades must be settled within two business days. However, open positions can be swapped forward to the next settlement date. Normally, open positions are automatically rolled forward. The interest rate for such a swap is predetermined – and swaps are themselves instruments that can be traded.

Rollover in the Forex Market simply reflects the cost of carry – the interest rate differential of the two currencies.