in share market, rollover is any important indicator?

Question

also explain it

Answer 1

Yes Roll over is an important indicator. The net of short of net of long will give tentative direction as to the possible movement of the stock markets.
Let me illustrate further
IF the price of tisco near the expiry is Rs 500, then the structure of the futures market requires that each month a contract is closed and the position re-opened again for the next future period. This ‘roll-over’ has a marked psychological effect on inexperienced investors.

Having taken the relatively difficult step of investing some of their savings in tisco futures they are required to make repeated decisions to spend money, closing the old contract and re-opening the new just to keep a long tisco position open. With futures there is no ‘do nothing’ option, like there is with a physical buy and hold investment.

The harsh fact of life is that if investors are right about tisco long term and wrong short term many of them who participate via futures will be expelled at rollover date if they have lost money in the previous month. It is much harder to pay up and re-invest after a loss than to do nothing, as would be the case with physical shares held in demat accounts.

Investors who fail the psychological test of roll-over will leave their position, rather disappointed not to have made money as quickly as they had hoped, and many will never return to benefit from the long term correctness of their view of tisco.

So before deciding if futures are suitable for them investors should seriously consider whether or not they are psychologically equipped to re-buy again and again after disappointment in the previous month.

Answer 2

I have only heard the term "rollover" applied to futures contracts. If that's not what you mean, then you need to repost this question with examples and detail.