Had a call option going bad yesterday and decided to roll it instead of taking the loss. It actually worked out and I made some profit.
Now I’m wondering if this was just luck or if I made the right move. I feel like I might set myself up for bigger losses later if I keep doing this.
Has anyone else been in this situation?
Rolling saved my ass on a Tesla call that was hemorrhaging cash. Extended it two weeks and walked away with 45% instead of getting wiped out.
Then I got cocky - tried it three more times that month. Lost bigger each time because I was just postponing disaster on bad trades.
Now I only roll if my original thesis still holds.
Rolling works about 30% of the time for me. Often just delays bigger losses.
Rolling a losing call might feel good, but it usually creates bigger problems. You got lucky this time, but rolling is just avoiding the loss. You’re throwing more money at a trade that already failed.
Trades fail because of bad market conditions or timing. I’ve watched traders roll the same position over and over, making their losses way worse.
Only roll if your original trade thesis still holds. If not, just cut the loss.
This video explains when rolling makes sense vs. when you’re just burning money:
Depends why your trade went south. If the underlying reason changed, rolling just kicks the loss down the road.
Some hopeless trades have turned around after rolling. But it becomes a bad habit where losses are never actually cut.
Set a limit on how many times rolling is allowed before taking the loss. Otherwise rolling could become a never-ending cycle.
Rolling only works if fundamentals remain intact. Seventy percent of rolled options expire worthless. Follow strict rules: original thesis must hold, sufficient time value is required, and manage strike adjustments. Neglect these and losses will increase.