Rolling vs. Rollover Options: Key Differences Explained

Imagine you're betting on whether a stock price will go up (that's an option).

Futures are similar but require an exchange of assets.

Unlike futures, options can expire worthless if the stock price doesn't move the right way.

If you bet on a stock going up, and it does, you've won (In-The-Money).

But, because options lose time value, it is better to collect profits, instead of keeping the option.

You "roll" options to make adjustments.

If the stock price went up, and is now worth more, then you roll and collect profits by switching to a new bet (call) if you think the stock will keep going up.

Unlike futures, traders 'roll' options to adjust existing positions.