What about rolling out to a further term? Suppose the underlying is not showing any directional change, but get more volatile. My directional opinion is unchanged, but the wider moves are threatening my money management stop. It seems that a further month spread would get me a lower delta until things either calm down, or I exit for the same loss but after a more convincing underlying move. And rolling might even pay for its commissions. What am I missing?
The issue is that these ICs traders disregard vol and timing. They're always in the mkt and there is no distinction between rolling and a new position as they're (always in the market). The typical retail option trader's chronology: 1) Buys calls and puts 2) Writes CC 3) Writes puts 4) Sells cheap verts 5) Sell stupid-wide ICs 6) Blows up 7) Works at Denny's
I definitely agree if your opinion of the underlying hasn't changed, and you are simply rolling out and/or up/down in hopes that the stock won't keep moving against you--which is often delaying the inevitable. However, what if your opinion of the underlying changes significantly based on the price movement since you put on the spread (e.g. the stock breaks through key support or resistance)? It seems that there might be value in, e.g. converting a bear spread into a bull spread, and if by converting your existing spread, rather than taking the whole spread off and putting on a whole new one, you save commissions and slippage that would be a tangible benefit (assuming you would have the conviction to put on that adjusted position on its own merit).