Risk & Positioning
Rolling Options Calculator
Separate old-position P/L from the cash flow and breakeven of a replacement option.
Read the old and replacement trades separately
An old short option collected $180 and now costs $310 to close. Its realized result is −$130. A replacement collects $360, so the roll ticket receives $50. If the replacement later costs $140 to close, its profit is $220 and the combined sequence earns $90 before costs.
| Event | Cash |
|---|---|
| Old opening sale | +$180 |
| Old closing purchase | −$310 |
| Replacement opening sale | +$360 |
| Replacement closing purchase | −$140 |
| Total | +$90 |
Until the replacement closes or expires, its received premium is offset by an open liability. Add fees on every transaction, and include stock cash flows if assignment occurs. Compare the new strike, maturity and capital needs with the old exposure.
A displayed credit can describe cash received today while the overall sequence is losing. For a debit roll, extra cash paid is not automatically the entire new risk either. Use the complete ledger and the replacement payoff rather than a single ticket summary.
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Reviewed . Examples are illustrative; verify exact contract and broker terms.
References: OIC: assignment.
About this calculator
How to use this tool
Positive cash received means credit; negative means debit. Old-position fees include opening and closing charges. New-position fees cover opening the replacement, with no assumed future close. Same option type, side and quantity are retained.
Lifecycle breakeven includes the realized old loss or gain and all entered cash flows. It is a root in the new option’s exercise region, not a claim that a roll erases a loss. If the root is outside that region, the tool reports no isolated breakeven or a flat breakeven range.
Higher strike is roll up; lower is roll down. More remaining days is roll out. Assignment, underlying share holdings, taxes and bid/ask execution are outside this single-option cash-flow calculation.
Worked example
A short call originally sold for $3, bought back for $5 and replaced with a $6 call realizes a $200 loss and receives $100 roll credit per 100-unit contract. Cumulative credit is $400 before fees.
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Model references and conventions
365 calendar days per year. Continuous rates for theoretical pricing. All examples are illustrative.
