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Roll out

Moving a position to a later expiration at the same strike, buying time for the thesis to work and collecting the difference in time value.

Rolling out keeps the strike and changes the calendar. Because the later contract holds more time-value, the roll almost always produces a credit, which is what makes it the most common defensive move in premium selling.

The credit is not free. You are extending the period over which the position can go wrong, and you are tying up buying-power-reduction for longer. Measure the credit against the extra days: $0.25 for 30 more days is a different trade from $0.25 for 7.

Example: short the XYZ 20 Mar $50 put for $1.30 with XYZ at $48.50. The March put is $2.20. Buy it back and sell the 17 Apr $50 put at $2.85 — a $0.65 credit for 28 extra days. Your effective cost basis if assigned drops from $48.70 to $48.05.

Related: rolling-an-option, roll-up, time-decay-curve, management-at-21-dte

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