Assume you are long on Nifty Futures @ 7600 expiring 26th June 2014 with an expectation that the futures will hit 7900. On 26th June this does not happen…but your are still convinced that the futures will hit 7900. So on 26th June you will close June contract and buy July contract expiring on 31st July hoping 7900 will happen sooner or later.
So what you have done is essentially a rollover of position.
@Karthik
Does this mean I have to invest double the investment?
Say, I bought may be 7900 CE option on 1st week of June at Rs 100 premium.
Since market did not turn up good, the price decreased from 100 to say a few rupees example 5 rupees.
Then if want to roll over to next month, I see the price of next month expiry around 100 again, due to time value.
Does this mean I have to sell off at 5 rupees and again buy the next month option at 100 rupees.
Does this mean I have invested doubly for the same position?
If you are trading options, yes what you have stated is true.