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. Option

    A financial derivative that represents a contract sold by one ...
  2. Options Roll Up

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

    To extend the expiration or maturity of an option or futures ...
  4. Roll Down

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

    The amount of return generated in a backwardated futures market ...
  6. Expiration Date (Derivatives)

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