Selling cash-secured puts is straightforward: sell a put, collect premium, hope stock stays above strike.
But what happens as expiration approaches?
Three scenarios face you:
- Stock is above your strike — Let it expire or roll to next month
- Stock is near your strike — Decision time: extend or take assignment
- Stock has crashed below — Your position is in trouble; adjust or accept loss
Most CSP traders panic here. They don't have a plan.
This guide shows you exactly how to roll cash-secured puts at every DTE stage—and when rolling makes sense versus accepting assignment.
Find your next roll target: Use our Strategy Analyzer to compare CSP premiums across different strikes and expirations, then track your rolls by uploading your broker statement.
Rolling Fundamentals: What You Need to Know
What is a CSP Roll?
A CSP roll closes your current short put and opens a new short put at a later expiration date.
The Mechanics:
Original Position:
Sold 1 XYZ $50 put 30 DTE, collected $2.00 premium
At 14 DTE, you decide to roll:
Step 1: Buy to close $50 put @ current bid ($2.30)
Cost: -$230
Step 2: Sell to open new $48 put at 30 DTE for $1.80
Credit: +$180
Net: -$50 debit to extend position
New Position:
Short $48 put, 30 days to expiration
Original $2.00 + New $1.80 = $3.80 total collected
Extended expiration by ~30 days
Why Roll a CSP?
| Reason | Situation | Outcome |
|---|---|---|
| Collect more premium | Stock hasn't moved much; you want income extension | Extend position, compound premiums |
| Avoid assignment | Stock approaching strike; you want to defer assignment | Extend 30+ more days, keep waiting |
| Adjust for price movement | Stock fell; you want new strike below | Roll down to lower strike |
| Reset for income | Stock is stable; you want next month's premium | Roll to next monthly expiration |
When NOT to Roll
| Situation | Reason | Better Action |
|---|---|---|
| Stock is way below strike | Rolling down is expensive (you're chasing losses) | Accept assignment or close |
| You've already rolled 3+ times | You're just delaying the inevitable | Accept assignment or take loss |
| You're down 75%+ of max loss | Rolling costs aren't worth remaining premium | Close and move on |
| Fundamentals have deteriorated | Company news is negative; expect further declines | Don't extend; accept assignment |
| You're happy with assignment | Stock has moved to your target (below strike) | Let it expire; take assignment |
DTE-Specific Rolling Strategies
Phase 1: 45-30 DTE (Early Management Window)
What's Happening:
- Your position is typically profitable or at break-even
- Theta decay is moderate (stock needs to move significantly to breach)
- Rolling costs are reasonable (both sides still have time value)
- You have flexibility to plan
Rolling Decision:
Scenario 1: Stock well above your strike (up 10%+ since entry)
Original: Sold $50 put, received $2.00, stock was $52
Now: Stock at $57, 40 DTE remaining
Put is worth $0.60 (decayed significantly)
Decision: Don't roll
Why? Stock is clearly not going to your strike
Action: Let it expire worthless
Result: Keep full $2.00 premium, no cost
Alternative: Sell new CSP on different stock
Use freed capital to start new position
Compound your income stream
Scenario 2: Stock is near your strike (±2%)
Original: Sold $50 put, received $2.00, stock was $52
Now: Stock at $51, 40 DTE remaining
Put is worth $1.50 (in the money, but DTE helps)
Decision: Consider rolling down
Roll down (sell $48 put):
Buy to close $50 put @ $1.50 = -$150
Sell new $48 put for $1.10 = +$110
Net debit: -$40 (extends, but costs money)
Alternative: Do nothing and let it ride
Stock might recover over next 40 days
If assigned, you buy at $50 (acceptable price)
Recommendation: Only roll if stock momentum is negative
Otherwise, let it play out
Scenario 3: Stock is well below strike (down 10%+)
Original: Sold $50 put, received $2.00, stock was $52
Now: Stock at $47, 40 DTE remaining
Put is worth $3.50 (deep ITM)
Decision: Accept assignment likely, but don't roll
Why? Rolling down to $45 would cost:
Buy $50 put @ $3.50 = -$350
Sell $45 put @ $2.00 = +$200
Net debit: -$150 (huge cost!)
Better options:
A) Accept assignment at $50 (you get stock at discount)
B) Close position now (buy $50 put @ $3.50, take loss)
C) Wait 30 more days (see if stock recovers)
Recommendation: Option A usually best
You get stock at $50 (discount to original $52)
You collected $2.00 premium upfront
Cost basis: $48/share ($50 - $2 premium)
Best Practice at 45-30 DTE:
- Only roll if stock is within 1% of your strike
- Roll up if you want higher profit target (rare)
- Roll down only if stock momentum is strongly negative
- In most cases, let it play out
Phase 2: 30-21 DTE (Decision Window Opens)
What's Happening:
- Theta is accelerating (1.5-2% daily decay)
- Your current put is eroding in value
- New puts 30-45 DTE have richest premiums
- Assignment is becoming likely if ITM
Rolling Decision Tree:
Is your put ITM (stock below strike)?
YES (Stock below strike):
├─ Assignment is likely
├─ Decision: Roll down or accept?
│
├─ Roll down IF:
│ - Stock momentum is negative but you still like it
│ - You want to defer buying for 30 more days
│ - You're okay with even lower strike
│
└─ Accept assignment IF:
- You're happy to own stock at that price
- You've collected good premium (profit target hit)
- Stock fundamentals are sound
NO (Stock above strike):
├─ Assignment unlikely
├─ Decision: Roll to next month or let expire?
│
├─ Roll IF:
│ - Stock is stable/slightly declining
│ - You want to compound premium income
│ - New premium justifies rolling cost
│
└─ Let expire IF:
- Stock is rallying (will be worthless)
- You've already hit profit targets
- You want to redeploy capital elsewhere
Example: Rolling Down (Stock Declining)
Original: Sold $50 put for $2.00, stock was $52
Now: Stock at $48, 25 DTE
Original put value: $2.50 (ITM, but DTE helps)
Scenario A: Let it ride (assignment likely)
Stock probably stays $45-50 range
Assigned at $50 cost basis
You own stock, can sell covered calls next
Scenario B: Roll down (if bullish on stock long-term)
Buy to close $50 put @ $2.50 = -$250
Sell to open $48 put for $1.80 = +$180
Net debit: -$70
New position: Short $48 put
Total collected: $2.00 + $1.80 = $3.80
New cost basis if assigned: $48 - $3.80 = $44.20
Result:
If stock recovers: Great! Collected $3.80 on lower strike
If stock keeps falling: Assigned at $48 (lower than $50)
Recommendation: Roll down if stock is decent company that's temporarily down
Don't roll if fundamentals are broken
Example: Rolling (Stock Stable)
Original: Sold $50 put for $2.00, stock was $52
Now: Stock at $51, 25 DTE
Original put value: $0.80 (OTM, still worth money)
Your choice: Roll or let expire?
Roll option:
Buy to close $50 put @ $0.80 = -$80
Sell new $49 put (next month) for $1.50 = +$150
Net credit: +$70 (you PROFIT on the roll!)
Total collected: $2.00 + $1.50 = $3.50
New cost basis if assigned: $49 - $3.50 = $45.50
Benefit: Extended position, collected additional premium (+$70)
Result: At next expiration, repeat process
Let expire option:
Keep your $0.80 profit (put expires worthless)
Total collected: $2.00
Move to new stock/position
Comparison:
Roll: $3.50 total over 60 days = 5.8% return on $50 required capital
No roll: $2.00 total over 30 days = 4% return on $50 required capital
Recommendation: Roll if premium justifies (net credit > $0.30)
Phase 3: 21-14 DTE (Last Good Roll Window)
What's Happening:
- Theta is extreme (2-3% daily decay)
- Current put is nearly worthless (if OTM) or deeply ITM (if ITM)
- Rolling spreads widen (liquidity thins)
- Assignment decision must be made
Rolling Considerations:
If OTM (Stock Above Strike):
Example: Sold $50 put, stock at $52, put worth $0.30
Should you roll?
Buy to close @ $0.30 = -$30
Sell new $50 put for $0.80 = +$80
Net credit: +$50
Total premium collected: $2.00 + $0.80 = $2.80
Days held so far: 16 days
Return per 16 days: $2.80 / $50 = 5.6%
Annualized: 130% (incredible!)
BUT: Rolling at 14 DTE means assignment is imminent next cycle
Better to just let it expire:
Keep $0.30 decay profit
Free up capital for new position
Don't create management burden
Recommendation: DON'T roll at 14 DTE if OTM
Let expire, move to new stock
If ITM (Stock Below Strike):
Example: Sold $50 put, stock at $47, put worth $3.20
Should you roll down?
Buy to close @ $3.20 = -$320
Sell new $46 put for $2.20 = +$220
Net debit: -$100
Cost to extend: $100
Remaining premium on new put: $2.20
Total premium if rolls: $2.00 + $2.20 = $4.20
Is it worth $100 to extend?
Only if:
A) You strongly believe stock will bounce back
B) You want to defer buying until later
C) The company has strong fundamentals
Recommendation: At 14 DTE, usually accept assignment
Let the put go ITM, get assigned
Own stock at $50 (cost basis $48 after premium)
Move on to next position
Don't throw more money after a losing trade
Best Practice at 21-14 DTE:
- If OTM: Let expire, don't roll (keep capital)
- If ITM: Usually accept assignment (rolling costs justify it)
- Only roll if you strongly believe in the stock long-term
- Rolling at 14 DTE only extends your management burden by 14 more days
Phase 4: 14-7 DTE (Final Stretch)
What's Happening:
- Assignment is essentially certain if ITM
- Rolling is rarely beneficial (not enough time value left)
- Your decision is binary: take assignment or close
At 14-7 DTE, Rolling is Usually a Bad Idea
Why?
Your put is 1-2 weeks from expiration
If OTM:
Roll costs your remaining decay profit ($0.20-0.30)
New position only has 14-30 days
Not worth the complexity
If ITM:
Rolling down costs significant money ($150-300+)
New position still faces assignment risk
Better to just accept assignment now
In both cases: Just let it expire or accept assignment
Don't keep rolling, extending, and extending
Exception: Major Reversal Signal
Stock crashed 20% over 2 weeks due to earnings
Now recovering sharply
ITM put that was worth $3.00 is now worth $1.50
Stock appears to have bottomed
Option: Roll down to lock in assignment price
Buy to close deep put @ $1.50
Sell new slightly lower put @ $1.00
Net debit: $50 (small cost)
Reasoning:
You believe stock has bottomed
Assignment at new lower strike is acceptable
One more roll captures upside reversal
Recommendation: Rare, but acceptable if conviction is high
Best Practice at 14-7 DTE:
- Don't roll unless stock has reversed sharply
- Accept assignment and move on
- Use freed capital for new positions
- Rolling at this stage extends stress without benefit
Cost Basis Management When Rolling
Rolling affects your cost basis if you eventually take assignment.
Example: Two CSP Rolls
Trade Sequence:
Month 1 (30 DTE):
Sell $50 put for $2.00
Collect: $200
At 15 DTE:
Buy to close $50 put @ $1.50 = -$150
Sell new $50 put for $1.60 = +$160
Net credit: +$10 (small profit on roll!)
Total premium collected: $2.00 + $1.60 = $3.60
Month 2 (30 DTE new expiration):
Stock at $49, still holding short put
Let it expire, assigned at $50
Assignment Result:
You buy 100 shares at $50 strike
But you collected $3.60 in premiums
Effective cost basis: $50 - $3.60 = $46.40 per share
On $5,000 stock purchase:
Actual cost: $5,000
Premium collected: $360
Net cost: $4,640
Savings: $360 (7.2% discount!)
Tax Implications of Rolls
When you roll, you realize a gain/loss on the closed put:
In example above:
Sold $50 put: $2.00 premium
Closed $50 put: $1.50 cost
Gain: $0.50 per share = $50 short-term capital gain
Then: Sold new $50 put for $1.60
Gain: $1.60 per share (if expires worthless)
Tax result (37% bracket):
$50 gain: $18.50 tax
$160 gain: $59.20 tax
Total: $77.70 tax on $360 profit
Net after-tax: $282.30
Best Practice:
- Track each roll separately for tax purposes
- In Roth IRA: No tax on rolls (huge benefit)
- In traditional account: Expect ordinary income tax on premiums
When to Stop Rolling and Accept Assignment
Rolling can become addictive. You keep rolling to extend positions indefinitely.
Stop Rolling When:
| Signal | Meaning | Action |
|---|---|---|
| You've rolled 3+ times | Original position is "dead" | Accept assignment, move on |
| Stock down 30%+ from strike | Fundamentals have broken | Close position, take loss |
| You're down 75%+ of max loss | Risk/reward is terrible | Close position, preserve capital |
| Fundamentals deteriorated | Earnings miss, bad news, guidance down | Don't extend; accept assignment |
| You keep adding capital to roll | You're throwing good money after bad | STOP. Accept assignment. |
| You've held position 6+ months | You've collected full premium cycles | Assign and move to new stock |
The 3-Roll Rule:
After 3 rolls on the same stock, accept assignment. Here's why:
Original: Sold $50 put for $2.00
Roll 1 (15 DTE): Sell new put for $1.60, cost -$0.50 net
Roll 2 (15 DTE): Sell new put for $1.40, cost -$0.60 net
Roll 3 (15 DTE): Sell new put for $1.20, cost -$0.70 net
Total premium: $2.00 + $1.60 + $1.40 + $1.20 = $6.20
Total rolling costs: -$0.50 - $0.60 - $0.70 = -$1.80
Net premium: $6.20 - $1.80 = $4.40
Time elapsed: ~4.5 months (3 × 45-day cycles)
Return: $4.40 / $50 = 8.8% over 4.5 months = 23% annualized
This is excellent! So why stop?
Because:
A) You've already captured the income
B) Assignment risk compounds (stock keeps declining)
C) Management complexity increases (4+ positions)
D) Better opportunities elsewhere (fresh CSPs on rising stocks)
Real Example: Complete CSP Rolling Scenario
The Setup:
November 2025: Stock XYZ at $100
Sell 1 XYZ $95 put, 45 DTE
Collect: $2.50 premium
Thesis: XYZ is strong; willing to own at $95
Month 1 (30 DTE decision point):
Stock is at $98 (minor decline)
Put is worth $1.80
Decision: Roll or hold?
Analysis:
Stock is still strong (only -2%)
New 30-DTE $95 put trades for $1.80
Rolling would cost: Buy @ $1.80, sell @ $1.80 = Neutral cost
Decision: ROLL (neutral cost, extend income)
Buy to close $95 put @ $1.80 = -$180
Sell new $95 put for $1.80 = +$180
Net: $0 (breakeven on the roll)
Total premium collected: $2.50 + $1.80 = $4.30
New position: Short $95 put, 30 DTE
Month 2 (15 DTE decision point):
Stock is at $97 (recovering!)
Put is worth $0.60
Decision: Roll or let expire?
Analysis:
Stock has recovered; $95 is now too low
Put will expire worthless
Remaining decay: $0.60
Rolling option:
Buy @ $0.60, sell new $95 put for $0.80 = $20 credit
But adds another 30-day management period
Decision: DON'T ROLL (let expire)
Keep the $0.60 decay
Free up capital
Move to new CSP on different stock
Total premium on XYZ: $2.50 + $1.80 + $0.60 = $4.90
Time held: 60 days
Return: $4.90 / $95 = 5.2% = 31% annualized
Result: Excellent trade! Move on.
Alternative Month 2 (if stock had crashed):
Stock is at $92 (crashed!)
Put is worth $3.20 (deep ITM)
Decision: Roll down or accept assignment?
Analysis:
Stock crashed 8% - something might be broken
Rolling down to $90 would cost: Buy @ $3.20, sell @ $2.40 = -$80 debit
Not worth extending
Decision: ACCEPT ASSIGNMENT
You get 100 XYZ at $95
Effective cost basis: $95 - $4.30 = $90.70
Market price: $92 (underwater by $2.70)
But: You collected $430 premium
Stock only needs to recover to $92.70 to profit
Already getting close
Result: Own XYZ at good basis, plan to sell covered calls next
The Bottom Line: CSP Rolling Strategy
Master These Rules:
✅ Roll only 30-45 DTE (best risk/reward)
✅ Roll only if net credit > $0.30 (worth the complexity)
✅ Don't roll if fundamentals deteriorated (accept loss)
✅ Accept assignment after 3 rolls (capitalize on gains)
✅ Let OTM puts expire at 14 DTE (no point rolling)
✅ Plan cost basis management (track for taxes)
Rolling compounds CSP income efficiently—but only when done strategically. Random rolling = extended stress with minimal additional profit.
Use rolling to extend income-generating positions on solid companies. Avoid rolling to chase losses or avoid decisions.
Next Steps
Ready to master CSP rolling?
First: Paper trade 3 complete CSP cycles (sell, hold, expire or roll).
Second: Track your rolling decisions—when they worked, when they didn't.
Third: Build your personal rolling rules based on your risk tolerance.
Fourth: Go live and compound premium income through strategic rolling.
Rolling done right turns CSP positions into long-term income machines. Roll discipline done wrong turns them into endless management nightmares.
Choose discipline. Let the compounding work for you.