When we left off last Monday, we were discussing a concern I had about the banks.

I had recommended late the prior week (Oct. 22 to be exact, on "Morning GPS," a daily before-the-bell commentary for members of Options GPS), to sell off any long positions in the banks and to get a little short, as a pullback seemed likely.

Those who felt the same way are in a pretty good position. But, many still have profits and principal still in the market and at risk.

So You Have a Profit ... Now What?

For those who are sitting on profits in your long puts, your job is only half-done! Locking in profits, lowering your risk, and maintaining your position still need to be accomplished.

This is where the true power of options comes in to play. This is what separates options from all other forms of investment in the financial markets ... the rolling technique!

In this weekly column, we've been looking at doing things in a different and, I think, better, way ... using options instead of the underlying securities (i.e., stocks, indexes, Exchange-Traded Funds).

I started by introducing you to the advantages of using options -- buying calls instead of stocks to create a long position, and buying puts instead of shorting stocks -- which is called, quite appropriately, "stock replacement."

Last week's article offered a way to safely, smartly and cost-efficiently play a potential downside movement in the banks.

Now that the position is on, it is time to manage it.

In this type of position, there is an extremely important technique that goes hand-in-hand with the stock-replacement strategy called the "rolling" technique.  Now is the perfect time to discuss this important "next step" in managing successful (and successfully managing!) positions.

Rolling is a continuation technique.