How to roll over digital currency contracts

Digital currency contract rollover: extend the holding time, manage risks or lock in profits. Choose a contract with the same direction as the original contract and a longer expiration time. To close the original contract and open a new contract, you need to pay a handling fee. Market risks need to be considered, stop-loss orders should be set in a timely manner, and positions should be managed carefully.

Guide to Rolling Digital Currency Contracts

In digital currency contract trading, rolling refers to the process of closing existing positions and re-establishing new positions in the same direction. The purpose is to extend a position, manage risk or lock in profits.

Why do you need to roll over?

• Extend the position holding time: If the contract is about to expire and traders are still optimistic about the direction of the position, they can extend the position holding time by rolling the position to avoid forced liquidation due to contract expiration.
• Manage risk: When the market is volatile, rolling positions can help traders adjust the leverage of their positions and reduce risk exposure.
• Lock-in profit: When a position makes a large profit, you can lock in part of the profit by rolling the position to avoid losses caused by market reversal.

How to roll over?

1. Choose a suitable new contract: Choose a contract with the same direction (long or short) as the original contract, but with a longer expiration time, usually the next quarter's contract.
2. Close the original contract: Close the existing contract according to the market price.
3. Open a new contract: Open a position on the new contract according to the direction and quantity of the original position.

Things to note:

• Handling fee: Rolling a position requires paying a certain closing and opening handling fee, so the handling fee cost should be considered before rolling the position.
• Market risk: Rolling positions does not eliminate market risks. If market prices fluctuate violently, it may still lead to losses.
• Stop loss order: After rolling a position, a stop loss order should be set in time to prevent large losses when the market reverses.
• Position management: Rolling a position will increase the leverage of the position, so positions need to be managed carefully to avoid excessive leverage.

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