Should I roll this losing option position to a later expiration, or take the loss now?

An 8-item checklist that scores whether rolling a losing option position to a later expiration is a defensible adjustment or an avoidance move, and recommends rolling, fixing gaps first, or taking the loss.

How is this calculated?

Each of the 8 statements is checked if true for the specific position. A score of 7 or 8 indicates a defensible roll, 4 to 6 indicates gaps to fix first, and below 4 indicates the loss should likely be taken instead of rolling further.

Options Roll or Take the Loss Checklist

Check What's True For This Roll

Check every statement that's true, right now, before you roll this position.

I can state a specific reason my original thesis is still valid, beyond not wanting to realize the loss.
I've calculated the net debit or credit of this roll and it fits inside my risk budget for this position.
The new expiration gives the underlying a realistic amount of time to reach my target, not just more time to hope.
I am not rolling further out-of-the-money in a way that increases my max loss versus the original position.
This roll does not extend my exposure through an event I was specifically trying to avoid, like earnings or a Fed announcement.
I would open this exact rolled position today, at this price, if I weren't already in the trade.
I have a hard limit on how many times I will roll this position before taking the loss, no matter what, and I know that number.
I am not rolling because closing the trade would mean admitting I was wrong.

Your Result

Check the statements that apply to this roll and click Check to see whether it holds up.

How this is calculated

This checklist does not evaluate whether your underlying thesis is correct. It checks whether the roll is a planned adjustment or an emotional way to avoid realizing a loss.
Rolling for a net credit is not automatically safer than rolling for a debit. Either way, recalculate your total risk on the new position before placing the roll.
A position rolled repeatedly without a hard limit can end up carrying far more risk, and far more time in the market, than the original trade ever called for.
If several items are unchecked, taking the loss and moving on is a legitimate outcome of this checklist, not a failure.

Risk & liability disclaimer: This calculator produces a mathematical estimate based on the numbers you enter. It is not financial advice and does not guarantee any trading outcome. Trading involves risk of loss, and past position sizing decisions do not predict future results. Trading Habits is not a broker-dealer, registered investment adviser, or tax professional, and is not affiliated with any broker, exchange, or data provider. We do not guarantee this tool is error-free or suitable for your situation - always verify results independently and consult a licensed professional before making any trading or financial decision. You could lose some or all of the capital you trade with.

Should I roll this losing option position to a later expiration, or take the loss now?

Check What's True For This Roll

Your Result

How this is calculated

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