Rollover when useful?

[marsman]

Some days ago I short-sold an option that expires this Friday.
The broker (IB) sent me today the following mail:
"IB FYI: Option Expiration Notification
Dear Trader,
We would like to inform you that your accounts have one or more option contracts
that are set to expire shortly. Please see the list below.
Please note that as a convenience to traders seeking to extend the expiration
date of existing positions, IB provides an Option Rollover Tool that allows you
to create orders in advance of expiration and automatically rollover existing
contracts into contracts with an expiration, strike and price condition of your
preference.
..."

I don't understand. Does it make sense to rollover a short-sold option at all?

 

[CrashProof]

IB is mainly marketing their Option Rollover Tool to you because its relevant to the investment products you use. Whether it makes since to use it depends on your particular position at the time. This is a generic message they put out and aren't recommending you use it for your particular position.

 

[marsman]

IB is mainly marketing their Option Rollover Tool to you because its relevant to the investment products you use. Whether it makes since to use it depends on your particular position at the time. This is a generic message they put out and aren't recommending you use it for your particular position.

Ok, got it, thx.
In the mean time I found this interesting read about rollover:
http://www.optionsplaybook.com/managing-positions/rolling-covered-calls/

 

[TradeCat]

Rolling over positions especially losing ones is a slippery slope.

 

[marsman]

Rolling over positions especially losing ones is a slippery slope.

I'm luckily in the positives, but I think rolling over is generally a slippery slope; I don't see any benefit in rolling over positions...

 

[lindq]

I'm luckily in the positives, but I think rolling over is generally a slippery slope; I don't see any benefit in rolling over positions...

If you're short and positive, take the money and be thankful that the steam roller didn't get you this time.

 

[marsman]

If you're short and positive, take the money and be thankful that the steam roller didn't get you this time.

Do you mean just me, or rather all option option short-sellers?
In my case the steam roller would need to be very fast and go a long distance...
And: have you yourself never short-sold any options?
And of course: how are option buyers going to be served if there are no sellers?...

 

[lindq]

Do you mean just me, or rather all option option short-sellers?
In my case the steam roller would need to be very fast and go a long distance...
And: have you yourself never short-sold any options?
And of course: how are option buyers going to be served if there are no sellers?...

Yes, I have shorted equity options and I was fortunate to have survived my margin calls when greeted with a black swan. I did so only because I was well capitalized. I paid very dearly for a lesson I will never forget.

But, golly gee, if you would like to put your ass on the line as a public service to option buyers, then please be my guest. I hope there is a special place in heaven for you.

 

[marsman]

Yes, I have shorted equity options and I was fortunate to have survived my margin calls when greeted with a black swan. I did so only because I was well capitalized. I paid very dearly for a lesson I will never forget.

But, golly gee, if you would like to put your ass on the line as a public service to option buyers, then please be my guest. I hope there is a special place in heaven for you.

And goodbye!

 

[CrashProof]

I'd recommend hedging your short strike with a long strike further OTM.