Roling covered calls

Discussion in 'Options' started by aplino, Sep 26, 2024.

Can I keep rolling over a covered call "indefinitely"

  1. yes

    4 vote(s)
    66.7%
  2. maybe

    0 vote(s)
    0.0%
  3. no

    2 vote(s)
    33.3%
  1. aplino

    aplino

    NOV 15 152 FOR 36.2
     
    #21     Sep 27, 2024
  2. BKR88

    BKR88

    There's currently ~14.36 extrinsic value in the Nov15 152 call so you're making ~8% in 45 days IF the stock stays above 152 and you hold until expiration (or get called early).

    You can keep rolling BUT if you don't want to be called away you should occasionally calculate the amount of extrinsic value in the option (or watch the 152 Put value). If it's getting close to zero you should roll or risk getting called away.
     
    #22     Sep 27, 2024
  3. aplino

    aplino

    This is the best post reply I got. That is the plan
     
    #23     Sep 27, 2024
    BKR88 likes this.
  4. Sergio123

    Sergio123

    You bought the steamroller.

    That was smart.
     
    #24     Sep 28, 2024
  5. ironchef

    ironchef

    When IV is around 100, selling vol can be very profitable.

    IMHO, this is the one who bought the steamroller:

    Long 60 DTE $150-$160 calls when ever MSTR was around $115-$120.

    It was in a TR all year.
     
    #25     Sep 29, 2024
  6. newwurldmn

    newwurldmn

    as long as rv is like 50.
     
    #26     Sep 29, 2024
    ironchef likes this.
  7. ironchef

    ironchef

    Exit with 20-30 DTE remaining.
     
    #27     Oct 1, 2024
  8. aplino

    aplino

    Some new thoughts. When the time comes to roll it over, assuming that the security price is above the strike price, 152, the conventional wisdom is to try to increase the striking price. What about if I decrease it instead, for a profit of course. The idea is to keep rolling it over as long as possible, reducing the current cost basis. Eventually capturing the cost with the higher intrinsic value. Any thoughts?
     
    #28     Oct 2, 2024
  9. BKR88

    BKR88

    Every time you roll you should calculate the amount of extrinsic value in the option to see if it's worth the risk. Obviously rolling up closer to the current price gets a greater profit but also increases risk. Just depends upon how comfortable you are with the underlying company. BTC can be pretty wild at times. I think if MSTR broke up in a big way I'd probably move the short call up along with price. Adjust back down if it drops near your strike. Haven't tried this so not sure how well it would work.
     
    #29     Oct 2, 2024
  10. aplino

    aplino

    thank you, I will post when I update
     
    #30     Oct 2, 2024
    BKR88 likes this.