roll-up
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Roll Up
1. In venture capital and hedge funds, the purchase and merging of two or (often) more small firms in the same sector. This is done to hedge risk; given the choice between two firms in which to invest, one more risky than the other, a fund or venture capital firm may simply buy out both of them and force a merger, hoping to split the difference in risk and return. Roll ups become more common in times of economic downturn as part of a market consolidation process.
2. To liquidate one option in order to buy similar one with a better strike price. Most often, an investor does this in order to maintain a position when he/she is bullish on the price of the underlying.
2. To liquidate one option in order to buy similar one with a better strike price. Most often, an investor does this in order to maintain a position when he/she is bullish on the price of the underlying.
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roll-up
A master limited partnership in which a number of existing limited partnerships are pooled into a single partnership.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.