Roll Back


DEFINITION of 'Roll Back'

In options trading, exiting one position and entering a new one with the same strike price but a closer expiration date. In a roll back, also called a "roll backward," both the old and new positions involve the same underlying security. If a trader held an October 50 call for TEVA and replaced it with a September 50 call for TEVA, he would be executing a roll back.


A roll back is one of many options trading strategies for rolling, or entering a new trade concurrent with closing an existing one in response to changing market conditions. The trader who replaced his October 50 call with a September 50 call might do a roll back if he thinks the former is no longer worth owning and the latter is a better bet. Closely related strategies include rolling down, rolling forward and rolling up. Rolling strategies help options traders to lock in profits, limit losses and reduce risk.

  1. Roll Forward

    To extend the expiration or maturity of an option or futures ...
  2. Options Roll Up

    The move from one option position to another that has a higher ...
  3. Option

    A financial derivative that represents a contract sold by one ...
  4. Expiration Date (Derivatives)

    The last day that an options or futures contract is valid. When ...
  5. Roll Yield

    The amount of return generated in a backwardated futures market ...
  6. Roll Down

    The replacement of an option with a new option that has a lower ...
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