Finding an options trade is only half the job.
Traders spend hours screening for implied volatility, comparing IV to historical volatility, studying expected moves, checking technical trends and deciding which strike and expiration offer the right balance of risk and reward. Then the order fills—and suddenly, many traders reduce their entire decision-making process to watching whether the stock moves up or down.
But the options market keeps changing after you enter.
Implied volatility rises and falls. Expected moves change. Delta changes. Events disappear from the calendar while new risks emerge. And the market continuously prices how much uncertainty it expects across different expiration dates.
In this Barchart options breakdown, Rick Orford demonstrates how volatility term structure can add another layer to the trade-management process—and uses a live Microsoft (MSFT) short put to answer one of the hardest questions options sellers face:
When a trade is already working, should you take the profit, hold through expiration, or roll it for additional premium?
The Chart Most Options Traders Aren't Watching
That's where Barchart's Volatility Term Structure enters the analysis.
Rather than showing one implied-volatility number, term structure plots IV across multiple future expirations. This allows traders to see how the options market is pricing uncertainty at different points in time.
Two concepts become particularly important: contango and backwardation.
Contango occurs when implied volatility generally increases as expiration dates move further into the future. More time means more opportunity for something unexpected to happen, so longer-dated options can command additional volatility premium.
Backwardation is the opposite. Near-term implied volatility is higher than longer-term volatility, which can occur when the market is pricing a specific near-term risk that it expects to fade afterward.
For Rick's Microsoft (MSFT) position, the curve was predominantly in contango, but there was a small pocket of backwardation around the September 11 expiration.
There wasn't an obvious volatility alarm surrounding his existing expiration.
Combined with the lower delta, falling option value and approximately 93% probability of profit, the data supported simply holding the original position and potentially allowing the put to expire worthless. In that scenario, the full $510 premium would be retained.
But the curve also revealed something else.
What If You Rolled the Trade?
Rick expanded the term-structure chart beyond the existing expiration and compared what the market was offering for additional time.
At September 11, a 20-delta put carried roughly 29.5% implied volatility. Move just one week to September 18, and IV increased to approximately 30.18%. October 16 offered 30.71%.
That means the first additional week captured roughly 56% of the entire IV increase available through October 16.
Instead of committing to another five weeks of exposure for the highest absolute IV, September 18 potentially offered a more efficient compromise: additional volatility premium for only seven more days in the position.
Rick then returned to Barchart's Naked Puts Screener looking for a new trade with roughly the same 20 delta and 80% probability of expiring out of the money.
The result was a $465 Microsoft put expiring September 18, offering approximately $610 in premium.
Barchart's Expected Move placed the lower end of Microsoft's projected range around $467, slightly above the proposed $465 strike, while the Trend tab showed maximum bullish readings across all three monitoring periods.
From $510 to a Running $990
Here's where the trade gets interesting.
The original put was sold for $510 and could now be bought back for approximately $130. Closing it would therefore lock in a running profit of $380.
Selling the new September 18 $465 put would then bring in another $610.
$380 realized from the first position + $610 from the new position = $990 running P&L
Compare that with simply allowing the original contract to expire worthless, which would produce the original $510 premium.
The roll therefore offered additional potential compensation in exchange for another week of market exposure and a higher short strike. It wasn't “free money”—Rick was deliberately accepting additional risk because the volatility curve, expected move and underlying trend supported the setup.
Term Structure Is a Tool, Not a Crystal Ball
There's an important limitation.
Volatility term structure does not predict whether Microsoft will rise or fall. It shows how the options market is pricing expected volatility across time.
It's also only a snapshot. IV can change immediately as prices move, news breaks or market expectations shift. And small differences in IV shouldn't convince a trader to remain in a position when the underlying thesis no longer makes sense.
That's why Rick combines term structure with Expected Move, trend data, delta, probability of profit and his willingness to own Microsoft if assigned.
The bigger lesson isn't that traders should always roll winning positions.
It's that trade management shouldn't stop when the order fills.
Put Barchart's Options Tools to Work
Barchart gives options traders multiple ways to continue evaluating a position after entry. Use Volatility Charts to compare term structure across expirations, Expected Move to see the market-implied trading range, Options Screeners to compare potential rolls, and Barchart Opinion data to check whether the underlying price action still supports your original thesis.
Because while finding the trade matters, knowing what to do with it after you've entered can matter just as much.
Watch Rick's full video to see the Microsoft trade unfold step by step, including exactly how he reads the volatility curve and compares the hold-versus-roll decision.
On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.