Roll – extend duration on existing option spread or trade, typically out to the next expiration cycle. This usually involves closing the existing near month option position and opening a similar option position in the far month. This exiting of existing position and establishing a new similar position usually in a different option expiration month, is called a “roll”. The terms “rolling” or “rolling out”, “rolling the position” or “rolling up and out” are often also used to describe this process.

Often the existing position is close to near month expiration, causing the roll to be required so that the existing option contract does not expire. Also typically a roll looks to reestablish a similar trading view for the next expiration cycle.

For example imagine a short call spread was originally established for a $0.33 credit on a $1 spread, but it is now trading for only $0.10. You could buy it back for $0.10, and then reestablish the same short call spread at the same strikes in the next month expiration cycle, but maybe for a $0.33 credit again. This keeps the same trade assumption (short delta on OTM call spread) but allows you to participate to get an extra month of time decay.

Please note: There are so many nuances to rolling options that it is hard to discuss in depth just in a glossary entry, but this was a simple overview.