Options Roll Up

Instead of letting your option expire, you roll it over. That means you close the contract that's about to expire and simultaneously open a new one with an expiration date further out in time.

This process can include a new strike price as well. Rolling up involves setting a higher strike price. Rolling down has the trader purchasing a new contract with a lower strike price.

You hold an option to buy 100 shares of BAC at a strike price of $30, with a May expiration. It's getting close to the expiration date. You want to use a roll up strategy. So you close out your current option and buy a new one. Your new contract gives you the right to buy 100 shares of BAC at a strike price of $32, with a July expiration.