Comments on: Roll up my FFIV calls.

By: admin

admin — Fri, 30 Sep 2011 02:58:28 +0000

Rolling up simply means trading an option spread, i.e., buying back the expiring call and selling another call of the same strike or a different strike of a later date (the latter has more time value). I use this approach to deal with situation where you don’t want your stocks (the options of which are in the money, hence, you face the stocks being called away). The answer to your first question is yes, your stocks will be called away with an ITM call, if you don’t roll up the options. For 2nd question, my thesis is that stocks spend most times in saw tooth fashion, particularly right now, we are stuck in a trading range. Yes, it may appear that you will miss the profit should the trend continue to go up. But what if the stock comes back? BIDU’s recent action is a good example. I have been holding BIDU for years. Although BIDU went from ~$100 to as high as ~$160 in the last 9 months or so, I always trailed behind with my options (strike ~105 and 110). Now BIDU’s price is back where it was 9 months ago, but I have already pocketed multiple months time value by selling calls.

By: Jim

Jim — Fri, 30 Sep 2011 02:48:59 +0000

I am new and having trouble understanding “rolling up”. I have two questions on this scenario. (1) Why aren’t you being called out on the highly profitable July Calls you sold? (2) By rolling into the Aug Calls don’t you risk greater exposure should the Bullish trend continue? Does this strategy depend on a pullback?

By: Klick

Klick — Wed, 03 Aug 2011 23:21:41 +0000

Many hands make light work.

By: Keren

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By: info

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By: Antonietta

Antonietta — Wed, 20 Jul 2011 16:27:52 +0000

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