Question now is should I close all the positions and iterate the covered call loop method (use options premium collected, buy more stocks and repeat non-stop to leverage without margin) with Bank of America OR... is there a strategy to cover part of the profit (sell stock) but keep short call option's positions and let it ride further?
1) Is that "real" money or virtual money? 2) Get out when the stock hits the strike price of the call option.
Take profit. Having regrets on the potential gain is better than a loss. You're really ballsy to stick 1MM into Citigroup.
Do you mean just buy back/cut loss the call options only and continue selling another set of covered calls further out in strike price, roll over and over non-stop? or sell the stock as well?
What happens if the call is not exercised when it passes strike price...? it will become ITM... =>meaning the losses in the call option will increase faster then the stock profit increase?
if the call becomes ITM then you'll realize the max profit for the trade, as the deltas in your long stock will always exceed or equal the deltas of your short calls. if you have the balls let it go to $2.5+ and then book $1.5MM+ profit. you can stay in disneyland a few days more then.
For anyone who really does the kind of option volume VM dreams about doing take a look at optionhouse's (etf forum sponsor) flat rates (would have saved over $14K in commisions on this fictional trade).
OptionHouse...flat rate to create unlimited covered calls!.. Sounds like another fictional broker... Even IB cannot compare with that rate.