Listen to a Business English Dialogue about Roll forward
Walter: Hi Naomi, have you ever heard of rolling forward in finance?
Naomi: No, I haven’t. What does it mean?
Walter: Rolling forward is when you extend the expiration date of an option or futures contract by closing out the current position and opening a new one with a later expiration date.
Naomi: Ah, I see. Why would someone want to roll forward their position?
Walter: It can be used to manage risk or to continue a trading strategy if the original contract is about to expire and you still want to maintain exposure to the underlying asset.
Naomi: That makes sense. So, it’s a way to keep a position open without having to close it completely?
Walter: Exactly. It gives traders flexibility and allows them to adjust their positions based on market conditions and their own objectives.
Naomi: Are there any costs or implications associated with rolling forward?
Walter: Yes, there can be costs involved, such as transaction fees and potentially a change in the value of the new contract compared to the old one.
Naomi: Got it. So, it’s important to consider the costs and benefits before deciding to roll forward a position.
Walter: Absolutely. It’s a decision that should be based on careful analysis and consideration of your overall trading strategy.
