Roll path

What rolling an option actually does

Rolling is not magic repair. It closes the current option position and opens a new option position, usually with a different strike, expiration, or both.

What the new trade must justify

• Whether the roll collects or pays additional premium.
• Whether total capital at risk rises or falls.
• Whether the new breakeven is actually better.
• Whether extra time helps the thesis or only delays a loss.
• Whether assignment exposure or buying-power use gets worse.

Hypothetical example

A trader rolls a threatened short put for a small credit but doubles the time in the trade and increases assignment exposure. The credit alone does not make the roll good. The new position still needs a valid thesis and acceptable risk.

Primary reading: FINRA options overview · FINRA assignment guide · OIC options basics · OIC exercising options · OCC options disclosure document · SEC Investor Bulletin on options