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Closing an existing options position and opening a new one with a different strike and/or expiration. Premium sellers roll to extend duration, collect additional premium, or manage a tested position.
⚡ KEY TAKEAWAY: Roll for a net credit or don't roll at all. Rolling for a debit just delays a loss. Best done before the position goes deep ITM.
DTE (Days to Expiration)
Enter at 30–45 DTE for optimal theta/gamma balance. Close or roll at 21 DTE or 50% profit — whichever comes first.
Assignment
Not a disaster — it's the plan in the wheel strategy. If you only sell puts on stocks you'd own, assignment is just the next step.
Annualized Return
Looks impressive but is misleading if you ignore losses. Track actual account returns, not annualized returns on winners only.
Breakeven
Always know your breakeven before entering. If the stock can realistically reach it, either widen the margin or skip the trade.