In a 3 month option when do you guys usually rollover (cause of the theta) if you gonna do the same bet again,like do you roll 2 months before expiration and enter a new 3 month ? (a long option position like a long call or a bull call spread)
I have this question because of the theta bleed,when do you usually roll due to that ?
Well, your theta depends on a variety of variables, doesn't it?
My point is that the act of rolling the position is a trade in and of itself. In every case, you need to do some analysis to determine what the best entry point for the "roll trade" is. There are no hard and fast rules for when the optimal time for the roll is.
I generally stay away entirely from very short-dated options, as, in my asset class, gamma hardly ever is worth the theta, so to speak. This may be different in your world. I don't know of any literature, but, if this is equity options you're trading, you should post your question on EliteTrader. There are two guys there, sle and atticus, who are experts and, I'm sure, can tell you if there are any rules of thumb that they like to follow.
I am in my first trade right now, on the vix futures. It expires on Tuesday, I got told I get a 40% concession on the spread if I rollover.. is there any downside to rolling over? I don't quite follow it all yet don't see why anything expires when the position/price of the vix changes every day anyway, regardless of which period you are in.