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.
Assignment Stress Test
Test your position under adverse market scenarios to understand assignment risk and potential losses.
Price: $450.00
Base Assignment Probability
30%
Premium Collected
$250
Maximum Loss
$43,750
Scenario Analysis
| Price Move | Final Price | Assignment Prob | P/L | Status |
|---|---|---|---|---|
| Current | $450.00 | 15% | $250 | Safe |
| -5% | $427.50 | 32.8% | $-1,000 | At Risk |
| -10% | $405.00 | 38% | $-3,250 | At Risk |
| -20% | $360.00 | 48.2% | $-7,750 | At Risk |
Break-even: $437.50 • Blue row shows current price scenario
Find real options with similar parameters
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.
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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.