Moving an option position to a higher strike in the same expiration, usually to lock gains on a long call or raise a short call's cap.
Rolling a long call up takes money off the table: you sell the appreciated in-the-money call and buy a cheaper higher strike, keeping upside exposure with less capital at risk. Rolling a short call up gives the underlying more room, for a debit.
The trade-off is always the same. Higher strikes mean less delta and less certainty, so you are exchanging probability for either cash or headroom.
Example: you bought the XYZ $50 call at $2.30 and XYZ is $56, with the call at $6.60. Roll up to the $57.50 call at $2.10 for a $4.50 credit. You have banked $4.50, cut risk from $2.30 to nothing, and still own upside — at the cost of giving up the $50 strike's delta.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Buying a call: payoff at expiry. A 105-strike call bought for 3 loses that whole 3 if the price finishes at or below 105, breaks even at 108, then gains a dollar for every dollar higher. The loss is capped at the premium; the upside is not capped.Delta across the range of prices. Delta says how much a call's price moves for a one-point move in the stock. Far below the strike it is near 0 and the option barely reacts; at the strike it is about 0.50; far above it approaches 1 and tracks the stock.
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