The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re answering the question, “When is it worth it to pay a debit to roll an option spread?” This is actually a question that comes in from one of our members and he said, “As I'm preparing or following, training for expiration, I see small debits to roll larger positions like QQQ, IWM and SMH, so definitely not paying to roll even if a small debit. Is this acceptable? What do you think about rolling for a reasonable debit just to extend the trade?” I think just for clarification, sometimes when we roll positions, if we have an iron butterfly or an iron condor, we sometimes might have to roll one side of the position for a small debit, but in our case, that other side that we roll is always taking in a credit that is more than the debit we paid on the previous side. For example, if we have to roll an iron butterfly, we might roll out the put spread first and pay a debit of say $5, but when we roll out the call s