1. To
buy or
sell an
option and then later buy or sell the same
option with a different
strike price because one believes the
price trend will continue. For example, suppose one buys a
call option giving one the right but not the obligation to buy a
stock at $10. One does this if one believes the
underlying price will be above $10 when the option expires. However, if it appears near expiration that the option is well above $10 and likely will continue to, say, $20, one may buy another call option with a longer
expiration and a strike price of $14 in order to capture higher
gains. Rolling options may provide an
investor with time to take full advantage of a prolonged price trend. It may be done with both call options and
put options.
2. See:
Roll over.