The term "rolling securities" refers to the practice of buying or selling a security while simultaneously engaging in a purchase or sale of another security that has a similar duration but a later maturity date. This strategy is often used by investors to manage their portfolios and maintain exposure to certain types of investments without experiencing a gap in maturity dates.
Rolling securities are commonly encountered in financial and investment law. This term may arise in contexts such as:
Users can manage some aspects of rolling securities through legal templates available from US Legal Forms, which can help in drafting agreements or understanding the implications of rolling securities transactions.
Here are a couple of examples of abatement:
Example 1: An investor holds a bond that matures in five years. As it approaches maturity, they sell it and simultaneously purchase a similar bond that matures in seven years, effectively rolling their investment.
Example 2: A mutual fund manager sells a short-term treasury bond and buys a longer-term treasury bond to maintain the fund's investment strategy. (hypothetical example)
| Term | Definition | Key Differences |
|---|---|---|
| Rolling securities | Buying/selling securities with overlapping maturity dates. | Focuses on managing maturity gaps. |
| Bond laddering | A strategy involving the purchase of bonds with different maturity dates. | Emphasizes diversification across maturity dates rather than simultaneous transactions. |
If you are considering rolling securities as part of your investment strategy, here are some steps to take:
For complex situations, seeking professional legal advice may be necessary.
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Rolling securities are transactions involving the simultaneous buying and selling of securities with similar durations but different maturity dates.