perhaps..but most covered call writers want to keep the stock...because they like it and are betting they can keep the premium of the short call as a small hedge to the down side...my opinion only...
no your right... I probably didn't express myself very clearly I don't think we can jump in without really knowing how much he received for the July call sold. Perhaps Mark is right...IF he received a nice premium then just let it get called away.
Thanks for responding First off, I do agree the best alternative would have been to do nothing. I tried to post this on Friday Am and it never got posted till the weekend. I bought back the July on Friday for a $498 loss and sold the Jan 10 for $1599 (2 contracts) Mark, Are you referring me to alternative strategies?? I am working with an IRA and am not approved for spreads, so actually I am not unhappy with a max gain of 7% and a lower break even between now and the new expiry, however if DIA drops enough may buy back the jan 10 calls at hopefully a gain and use the range to determine a new strategy, which has worked very well for me over tha past several months..I just got stuck this time. I am looking forward to reading your books. Cupboard calls and bollinger bandaids are technical terms..just like delta force and time delay. Take care and thank you all very much for posting
I'm not Mark If you're not aware of it, when you roll a covered call out, the combination of the buy back and the sale is a calendar spread. If the strikes are different, it's a diagonal. If you fancy doing the roll in one order, attempting to get a better fill (w/o legging out/in) and nicking something off the B/A spread, then a spread order is the best way to facilitate the roll. I have no clue what trading levels are currently allowed in IRA accounts. If it's a case of it being available to you but you just don't have approval, contact your broker and request it. In the old days, explaining the above by phone used to get it immediately. With the internet, now you have to type it
Hi Spindr. I was reading Dagnyt's response originally and thus responded to Mark. Your recent response clarifies the transaction for me, and it does make sense, thanks and I will check with my broker on that. Thanks Tom