In Forex trading market (FX) a rovollers is the action taking place at end of day, where all open positions with value date equals SPOT, will be rolled over to the next business day. Trading platform offer the rollover process but it involved rollover interest fee which is calculated according to the difference between the traded currencies interest rates. Even though the mighty US dominates many markets, most of Spot Forex is still traded through London in Great Britain. So for our next description we shall use London time. Most deals in Forex are done as Spot deals. Spot deals are nearly always due for settlement two business days later. Rollover is also a process whereby a financial instrument such as a CD is reinvested at maturity.
Spot deals are nearly always due for settlement two business days later. This is referred to as the value date or delivery date. On that date the counter parties theoretically take delivery of the currency they have sold or bought.
In the spot market, the settlement of a currency trade, in most cases, requires the actual delivery and acceptance of the currency. However, most Forex traders do not trade currency with the intention of taking or making delivery of the currency—they trade for profits from speculation. Hence, most brokers who cater to the speculators automatically roll over the contracts from 1 value date to the next on each good business day until the trader closes the transaction—a process called, naturally enough, a rollover. Rollovers, in effect, continually delay the actual settlement of the trade until the trader closes her position.
For example, on Monday all position with value date of Wednesday (in case of T+1) will be rollover and the value date will be updated for Thursday. Position with value date of Friday will be updated with value date of next Monday.
