rollback

Roll Back

To sell an option position and buy another with the same underlying asset and strike price, but with an earlier expiration date. One may also call this rolling backward.

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rollback

A retroactive claim for a higher ad valorem (property tax) rate when property is sold or put to a higher use than the one for which it was assessed.The rollback period can be as great as 10 prior years of recalculated taxes.

Example:  Farmer Brown owns 100 acres of land at the corner of a busy road used by almost all commuters in the area. The land is worth at least $200,000 an acre, but because of state law favorable to agricultural uses, it is appraised for tax purposes at only $10,000 an acre. Farmer Brown sells the land to Doris Developer, who is surprised when the real estate tax bill comes due
a few months later and there is a rollback for 5 years. Doris will owe 5 years of prior real estate taxes calculated on an appraised value of $200,000 per acre. In all likelihood, Farmer Brown had an innocent-sounding clause in his sales contract that said, “The parties will prorate real estate taxes as of the date of closing, except that seller shall not be responsible for any increase in taxes
as a result of the sale.” Without the clause, if they had simply agreed to pro-rate taxes (as most form contracts provide), then Farmer Brown might have to reimburse Doris Developer for over four years, worth of the taxes.