Rolling (an Option)

Rolling means closing an existing option position and simultaneously opening a new one, typically at a later expiration, a different strike, or both — a way to adjust a trade already in progress rather than letting the original contract run to expiration. A trader rolling a covered call that's gone in-the-money, for example, buys back the current call and sells a new one further out in time and often at a higher strike, usually to avoid an assignment they aren't ready for yet or to reset the strike further from the stock's current price. A roll can come out as a net credit (collecting more from the new option than paying to close the old one) or a net debit (paying more than collected), depending on the specific strikes and expirations involved. Rolling doesn't eliminate the underlying obligation — it postpones and reshapes it — and repeated rolling purely to avoid ever being assigned can cost more in net debits over time than simply accepting the original assignment.