roll down

roll down definition - finance
To move from one option position to another one that has a lower strike price. The first option position is liquidated before the new one is taken. Roll downs occur because the option is going to expire and the trader wants to retain the position.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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