Written by Upstox Desk
5 min read | Updated on July 31, 2025, 18:25 IST
Summary:
Introduction to option roll up
How option roll up works
How to execute an option roll up
Types of option roll up
Summing up
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In the context of options trading, an option roll up refers to an existing position that is closed and a new one is opened at a higher strike price. If you are just getting started with rolling options, this blog will help you with the fundamentals and help you make better decisions to get the returns you want.
In the context of options trading, an option roll up refers to an existing position that is closed and a new one is opened at a higher strike price. This is the opposite of option roll down, where the current position is closed and a new one is opened at a lower strike price. This blog will introduce you to the basics and help you make better investment decisions.
When the current position is closed and a new one is opened for a higher strike price, it is known as an option roll up. This is for the same underlying asset; the existing contract is struck and a new one at a higher strike price is agreed upon. So that there is no loss from profit erosion or slippage, the investor executes both contracts simultaneously.
The roll up procedure is the same, irrespective of whether it is a call or put position. In this context, it is a bullish outlook when there is a call option because the expectation is that the price will increase. It can also be a bullish perspective when there is a put option because there is the anticipation that the price will not fall.
However, there is one thing that you will need to keep in mind to ensure that the cost of entering a new position should not be more than the profits from the previous contract.
To execute a successful option roll up, the following steps may be considered.
Usually, an option roll up is pursued by investors when there is a degree of certainty that the movement of the underlying asset will be in a more favourable position. However, remaining vigilant will ensure the chances of potential returns are higher and losses are minimised.
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Upstox Desk
Upstox Desk
Team of expert writers dedicated to providing insightful and comprehensive coverage on stock markets, economic trends, commodities, business developments, and personal finance. With a passion for delivering valuable information, the team strives to keep readers informed about the latest trends and developments in the financial world.
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