A Long Jelly Roll is an option spread-trading strategy that exploits price differences in horizontal spreads. The strategy involves buying and selling options with different strike prices, but with the same expiration date. By simultaneously holding both a long and short position, the trader can profit from any movement in the underlying asset's price, regardless of direction.The key to successful jelly roll trading is to choose your strikes carefully. You want to find two options that are relatively close in price, but which have a significant enough difference between them that you can profit from the spread.For example, If you think XYZ stock will move higher over the next month or so, you might buy a call option with a strike price of $50 and sell a call option with a strike price of $55. If XYZ does indeed rally during that time frame, your net gain on the trade will be maximized if it closes at or near $55 per share; conversely, if it falls back below $50 per share your losses will also be minimized.
