I’ve been seeing the term ‘roll position’ a lot lately in options trading discussions. Not quite sure what it means or why traders use it.
Anyone here familiar with this strategy? Would love to understand how it works and if it’s something I should consider for my trades.
Rolling positions can be pretty useful, especially when a trade isn’t going your way.
Basically, you close out your current option and open a new one with different specs. It’s a way to adjust your strategy without totally bailing on the trade.
Personally, I’ve used it a few times to give myself more time when my original expiry was approaching too fast. Just be careful not to get caught in a cycle of constant rolling.
Rolled a few trades last year. Moved expiry out on a losing AAPL call. Saved me about $500. Gotta watch those fees though.
Rolling’s a solid tool, but it’s not magic. It can buy you time or adjust your position, but remember you’re still opening a new trade. I’ve seen traders get stuck in a loop, constantly rolling and racking up fees.
Use it when you’re confident in your outlook but need tweaks. Like if earnings are delayed, you might roll to a later expiry. Or roll to a different strike if the stock moves but you think there’s more to come.
Just don’t use it as a crutch to avoid admitting a trade was wrong. Sometimes it’s better to take the L and move on to the next opportunity. Always weigh the new trade on its own merits.
Rolling saved my butt last month on a SPY put that was going south.
I closed the losing position and opened a new one with a lower strike, giving myself more time. Ended up turning a potential 40% loss into a 15% gain.
It’s not always the right move though. I’ve definitely over-managed trades by rolling too much.
Rolling positions:
• Closing current option
• Opening new one with different strike/expiry
• Extends trade duration
• Can adjust risk/reward
• Common for managing winners/losers
Carefully analyze risk before rolling.