Is it better to roll options or take assignment? (my complete guide after $80k in profit in 2025)

Is it better to roll options or take assignment?

→ Complete Options Trading Answer 👇

What to Do When Your Cash-Secured Put Goes In-The-Money

Short answer: Rolling for net credit is almost always better than taking assignment or closing at a loss. But most traders don't roll because manually calculating all the options is time-consuming and confusing.

I'm going to show you exactly how I handle ITM cash-secured puts, including a real example from last week where I turned a $7 in-the-money position into additional profit.

Why Most Traders Panic When CSPs Go ITM

When you sell a cash-secured put and the stock drops below your strike, you have three choices:

1. Take Assignment

• You're forced to buy 100 shares at your strike price
• Ties up significant capital
• You become a stockholder (for better or worse)

2. Close at a Loss

• Buy back the put at current (higher) price
• Realize the loss immediately
• Move on to another trade

3. Roll to Another Strike/Expiration

• Extend time and/or change strike
• Collect additional premium
• Avoid assignment (usually)

Most traders choose #1 or #2 because #3 seems complicated.

But rolling is almost always the best choice financially.

———

Real Example: My NVDA Put Goes $7 ITM

Here's exactly what happened recently:

Original Trade (December 9, 2025):

• Sold NVDA $195 PUT @ $2.00 premium
• Expiration: January 8, 2026 (30 DTE)
• Premium collected: $200
• Collateral: $19,500

NVDA was trading around $202 when I sold this. It seemed safe.

Current Situation (January 8, 2026):

• NVDA dropped to $188
• My $195 PUT is now $7 in-the-money
• Current value of put: ~$9.00

If I do nothing, I'll be assigned 100 shares at $195 tomorrow.

———

Analyzing My Options

Let me break down each choice:

Option 1: Take Assignment

What happens:

• Buy 100 NVDA shares at $195 = $19,500
• My cost basis: $193/share ($195 strike – $2 premium collected)
• Current market price: $188
• Unrealized loss: $500 ($5 × 100 shares)

Then what?

• Hold shares and hope NVDA recovers
• Sell covered calls to collect more premium
• Tie up $19,500 in capital

Pros:

• Simple – just let it happen
• Now own NVDA (if you wanted it anyway)
• Can start wheeling with covered calls

Cons:

• $19,500 locked up
• Down $500 immediately
• Might take months to recover

———

Option 2: Close at a Loss

What happens:

• Buy back the put at $9.00
• Cost to close: $900
• Original premium collected: $200
• Net loss: $700

Pros:

• Cut losses quickly
• Free up capital for new trades
• Mental fresh start

Cons:

• Realize a $700 loss immediately
• Give up on the position
• Miss potential recovery

———

Option 3: Roll for Credit

What happens:

• Close current $195 PUT (costs $9.00)
• Open new PUT at different strike/expiration
• Net result: Collect additional premium

The problem: There are dozens of combinations.

Which strike? $190? $185? $180? Which expiration? Next week? 30 days? 60 days?

Manually checking every option takes hours.

This is where most traders give up.

———

How I solved this

There are a few tools you can use

• Your broker's options chain (manual calculation)
• Excel spreadsheet (time-consuming)
• QuantWheel, OptionStrat or similar tools

https://preview.redd.it/4ija0l9575cg1.png?width=2470&format=png&auto=webp&s=fa1ea4bf5e3499f34cf85c133c2d9c77c9e7b9c3

Here's my workflow:

1. Enter Current Position:

• NVDA $195 PUT
• Expires January 8, 2026

2. Set Preferences:

• "Show me OTM options" (I prefer strikes below current price)
• Use mid-price quotes (between bid/ask)
• Minimum 15 DTE (I want at least 2+ weeks)

3. Hit "Calculate"

In 30 seconds, I see every viable roll:

Option A: Roll to $190 PUT (30 DTE)

• Close $195 PUT: Pay $9.00
• Open $190 PUT: Receive $12.50
• Net credit: $3.50 ($350 premium)
• New cost basis if assigned: $184.50

Option B: Roll to $185 PUT (45 DTE)

• Close $195 PUT: Pay $9.00
• Open $185 PUT: Receive $11.80
• Net credit: $2.80 ($280 premium)
• New cost basis if assigned: $180.20

Option C: Roll to $192 PUT (21 DTE)

• Close $195 PUT: Pay $9.00
• Open $192 PUT: Receive $13.20
• Net credit: $4.20 ($420 premium)
• New cost basis if assigned: $185.80

———

My Decision: Option A

I chose to roll to $190 PUT (30 DTE) for $350 net credit.

Why this option?

1. Lower strike = Better chance of staying OTM (NVDA only needs to stay above $188, not $195)
2. Reasonable time = 30 days gives NVDA time to stabilize
3. Good credit = $350 improves my cost basis significantly
4. Best risk/reward = Balanced approach

My new position:

• NVDA $190 PUT expiring February 7, 2026
• Total premium collected: $550 ($200 + $350)
• New cost basis if assigned: $184.50

Compare to taking assignment:

• Assignment cost basis: $193
• Rolling cost basis: $184.50
• I'm $850 better off by rolling

———

The Math Behind Why Rolling Works

Let's compare all three options financially:

Take Assignment:

• Buy at $195
• Minus $2 premium
• Cost basis: $193/share
• At current $188 price: -$500 unrealized loss

Close at Loss:

• Paid $900 to close
• Collected $200 originally
• Net loss: -$700 realized

Roll to $190 PUT:

• Collected $350 more premium
• Total collected: $550
• If assigned at $190: Cost basis is $184.50
• At current $188 price: -$350 unrealized loss
• $350-700 better than other options

Plus: I still have 30 days for NVDA to recover above $190, in which case the put expires worthless and I keep all $550 premium with zero assignment.

———

Common Rolling Mistakes to Avoid

Mistake #1: Rolling for Debit

• Never pay to roll
• Only roll when you collect net credit
• Otherwise you're just delaying the loss

Mistake #2: Rolling Same Strike Further Out

• Doesn't improve your situation
• Just kicks the can down the road
• Lower the strike when rolling

Mistake #3: Rolling Too Far OTM

• Tempting to roll to $180 or $175
• But premium drops significantly
• Balance strike selection with premium collected

Mistake #4: Not Comparing Options

• First roll you see isn't always best
• Compare 5-10 different combinations
• Optimize for your goals (time vs. credit vs. strike)

Mistake #5: Panicking and Closing

• Closing realizes the loss immediately
• Rolling usually recovers most/all of it
• Only close if thesis is broken (company bad news, etc.)

The key is having some system for comparing roll options quickly.

———

When to Take Assignment Instead of Rolling

Rolling isn't always the answer. Here's when I do take assignment:

1. I Want the Stock Anyway

• Company I genuinely want to own long-term
• Price is attractive even without the premium
• Planning to wheel it (sell covered calls)

2. Premium for Rolling Sucks

• Can't get meaningful credit
• Better to own shares and sell CCs
• Underlying is at strong support

3. Thesis is Broken

• Company announced bad news
• Market environment changed drastically
• Better to close/roll far OTM and move on

Example: If NVDA announced a massive recall or regulatory issue, I might take assignment and immediately sell the shares, or close the position entirely.

But in normal market conditions with quality stocks? Roll for credit.

———

Summary: My ITM CSP Workflow

When my CSP goes ITM, I:

1. Assess the situation How far ITM? How much time left? Is my thesis still valid?
2. Calculate roll options Use your tool to Compare 5-10 scenarios Look for net credit of at least 1%
3. Choose best roll Usually 20-40 delta 30-45 DTE Lowers strike if possible
4. Execute and track Enter the roll Update my journal Set alert for new position

This process takes 5 minutes total.

The panic is gone because I know exactly what to do and have tools that make it easy.

———

Key Takeaways

✅ Rolling for credit beats taking assignment in most scenarios

✅ The right tools make rolling easy instead of overwhelming

✅ Compare multiple roll options before executing

✅ Lower your strike when rolling to improve odds

✅ Only take assignment if you want the stock anyway

My NVDA example:

• $7 ITM position
• Rolled for $350 credit
• Lowered strike from $195 to $190
• New cost basis: $184.50 vs. $193
• $850 better outcome than taking assignment

Bottom line: ITM positions aren't failures – they're opportunities to collect more premium and improve your cost basis. You just need the right approach and tools.

———

Luka Knezic