Is rolling always better than closing?

No. Sometimes closing and taking the loss is the correct risk decision.

What is a roll for a credit?

Closing the current position for less than the new premium received, netting a credit.

Options WhaleEarnings volatility research

Concept guide

Rolling Options

Rolling is closing one option position and simultaneously opening another, usually with a later expiration or a different strike.

Concept

What a roll changes

A roll changes the expiration, the strike, or both. Rolling out adds time; rolling down or up changes where the position is exposed. A credit roll is not automatically an improvement.

Judging a roll

Compare the net credit or debit, the strike change, the added time and the revised breakeven. Rolling to avoid a loss can simply defer and enlarge the risk.

Credit rolls that move the strike further into risk increase exposure.
Rolling short-dated positions repeatedly compounds assignment risk.
The roll calculator shows the revised breakeven.

FAQ

Is rolling always better than closing?: No. Sometimes closing and taking the loss is the correct risk decision.
What is a roll for a credit?: Closing the current position for less than the new premium received, netting a credit.