Quite simply, I like putting the least amount of capital at risk for the best potential reward possible. In the world of buying and selling stock options, choices are made in regards to which strategy is best when considering a trade. If an investor is bullish, she can buy a call or sell a put, whereas if she is bearish, she can buy a put or rollnig a call. Rolling Can Help You Dodge AssignmentRolling is a way of trying to put off assignment (or avoid it altogether).
After rolling you will continue to have an open position, the underlying (stock, ETF, index, etc.) rolling out put options to buy a constant. You might roll a position from one that was a vertical call or put spread into one that is morphed into a calendar or time spread. That combo would become a horizontal spread. You might roll a position that was a calendar spread into one that is morphed into a vertical spread, the position being bullishly or bearishly biased putt completion of that roll.
An Introduction bky RollingRolling is one of the most common ways to adjust an option position. The objective is to put off assignment, or even avoid it altogether. Summary:Rolling forward — replacing a current short option with another expiring later — is an attractive policy. It produces additional income while enabling the option writer to avoid or defer exercise. They give you the right, but not the obligation, to buy or sell a given underlying investment.
That right changes in value along with the value of the investment.M.