Rolling Options: EVERYTHING You Need to Know || Fidelity Walk-Thru
ฝัง
- เผยแพร่เมื่อ 5 ต.ค. 2024
- In this video we are talking about Rolling Options when it comes to Covered Call Options strategies and Cash-Secured Put Option Strategies. Specifically we will be walking through how to roll your options on the Fidelity Brokerage Platform.
➡ / averagejoeinvestor ⬅
WANT ACCESS TO ALL OF MY SPREADSHEETS I USE ON THE CHANNEL ALONG WITH THE MONTHLY DIVIDEND STOCK SPREADSHEET AND INSTANT AWARENESS OF CHANGES TO MY PORTFOLIO? JOIN THE PATREON COMMUNITY!
➡ / averagejoeinvestor ⬅
Need a GREAT Dividend Tracker for your portfolio? Here is what I use and it is EXCELLENT:
The Dividend Tracker: thedividendtra...
Leave Me a Voice Message with a Question and it may be featured in a future video: www.speakpipe....
This communication/content is for informational purposes only and is not intended as personalized investment advice, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon for purposes of transacting in securities or other investment vehicles.
Joe,
Great and informative video on rolling options, very helpful! I enjoy all your videos and watch many of them numerous times!
Thanks
This is very helpful. I enjoy your content and have learned a lot from you!
Thanks, Joe! Takes the fear out of new ( for some of us ) stuff.
When is the most profitable time to roll? Before it goes ITM, as it's going ITM, or a little after it goes ITM? Thank you
Thanks for the great info, Keep it coming. I always look forward to your new videos. When you rolled and took the net debit of $-154.36 that was on the roll, but you also collected for the original writing of the call and got something there correct? thanks as always.
Excellent video, one of my big questions and it was answered in detail.
Another great video thanks Joe. I'm sure I'm missing something, but at about the 5:35 mark, you mentioned that the strike price for your option was 446, but your cost basis was 450. In previous videos, you recommended always selling call options with strike prices ABOVE your cost basis so you'll essentially never lose money (aside from opportunity loss). Is it correct that your cost basis was actually 450 and you sold a call for 446? Thanks again!
You can do it but it's recommended to always close out the trade, or roll, if you do sell at a strike below your share price and it goes against you.
Yeah, good question. I’m guessing the stock price had dropped significantly and he chose a strike price lower than his cost basis for a more desirable premium yet hoping the price would recover but that the contract would still expire worthless. That’s my guess but I wish he would’ve commented on that.
Excellent video, I needed that piece of knowledge. Thank you, Joe!
Joe....can you please create an options Playlist? From beginner to advanced? Interested in looking at them but not sure where to begin. Thanks!!
Very well explained..thanks!
Glad it was helpful! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Do you teach this in patreon group? That is to say- do you walk us thru steps live while we assign call options? Thanks
great information...t you for being so transparent.🥰
Great overview on rolling options!
Very helpful, thanks!!
Good description!
Thanks Dean! Appreciate the feedback! 😎
@@AverageJoeInvestor If you are willing to take a $154.36 loss by using the 9/11 expiration date, which expires in 10 days,
WHY NOT just go out to the 9/22 expiration date and get a $12 credit.
For an additional 11 days till expiration, you are ahead $166.36.
$12+$154.36= $166.36
You got PAID, to get your strike price, back up to your cost basis, instead of PAYING to get back to your cost basis.
If you have to PAY $154.36 to get your strike price back up, to your cost basis of $450, then $450 is no longer your cost basis. $451.54 is your new cost basis.
I agree that there ARE times when you should roll for a debit, to better your position, in a reasonable amount of time, but I don't think this situation is one of those times.
By the way, why were you selling call strikes BELOW your cost basis in the first place?
Rule #1) Protect your capital.
Rule #2) See rule #1.
Just my 2 cents worth.
@@AverageJoeInvestordoes your brokerage charge more for a roll than for just opening the trade to begin with? My brokerage doesn’t have a roll option so I need to do 2 trades separately. Not a huge deal but slightly annoying.
Nice and easy to understand, thank you! I was wondering if there are any 20-30 dollar dividend etfs out there, that you know about, that are not traps.
can you explain choosing net bid or net ask as opposed to net midpoint when rolling? why to choose each?
The less favorable the price you set for a limit order, the more likely it is your order gets filled. Selling, you generally cannot get more than the midpoint, and buying, you generally won't pay less than the midpoint. I usually go for halfway between the midpoint and the bid (when selling), and halfway between the midpoint and the ask (when buying).
I need some advice: I currently have 3 TSLA 215c 7/12. TSLA is currently at $250. Should I buy to close my 3 covered calls and roll up and out to a higher strike? I can get a net credit of $1500 and push up the strike to 210 if I roll to the 9/20 exp date.
Any thoughts?
Much appreciated.
Can you roll really high and close out for little loss?
Joe, have you looked into Poor Man's Covered Calls, takes less capital than a covered call?
Avoid. Even an initially deep ITM call that has a 10-20% drop in the underlying can result in a 40-70% loss on the long call.
It’s also called a diagonal I believe but yes only experienced options trader should attempt this. Most newbies will get burnt.
Though it’s a very lucrative income, you won’t be able to do this unless you have Margin which is level 3 and at least $2k in assets.
And you would need the Sell Calls to below your bought Call long.
How can I know in advance when you will be on?
$0.02
Wait, do you think cryptocurrency will crash? I dont think so. More and more companies are integrating cryptocurrency into their operations: Amazon, Cannafarm Ltd, Burger King, even Starbucks, dude!
I'm facing this currently. I've got 2 brk.b contracts with a strike of $350 expiring 09/15. It's currently at $363. Luckily the basis is $332 so I can do nothing, let the assignment occur, pocket the $18 per share. I've been contemplating the wisdom of spending the $2800 to buy to close. Between gaining the difference between $350 and the current price and then adding a new CC with a higher strike it seems like I'll come out to the good. Net debit will occur with options but net overall profit will be positive.
@babarock2000
" I've been contemplating the wisdom of spending the $2800 to buy to close"
I would not close, or roll for a loss in this situation, if I were in your shoes.
I would buy to close the 2 contracts with the $350 strike and the 9/15 expiration, for a $13.35 loss. (currently), then, simultaneously,
sell to open the 2 contracts with the $355 strike, and the 10/20 expiration, for a $13.73 credit. (currently).
This earns you a net $76 credit. If the dollar amounts have changed against you, by Tuesday 9/5, you may have to go out to the 11/17 expiration, with the $360 strike.
This also raises your share price appreciation by $1,000, if you can get the $355 strike, or $2,000 if you get the $360 strike.
Yes, the $355 call strike is STILL in the money, but so what.
You are not likely to get assigned early, unless the EXTRINSIC value of the premium falls below 10 cents.
Currently, your 9/15 $350 call strike has an EXTRINSIC value in the premium, of 49 cents. (currently).
You have time to see if BRK/B will pull back a little. It currently looks like it is a little overbought right now, and might have a pull back.
If the share price will pull back a little, BEFORE you actually NEED to roll, (for a net credit), you may be able to get a shorter expiration date.
Shorter dates are preferable to longer dates, when SELLING EXTRINSIC VALUE in the premium. You get a larger annualized ROI.
That's my 2 cents worth. Good luck.
@@thomasd5488 this is great advice and I wonder about all the folks who would just recommend to close and move on while in this case you'd get a "guaranteed" $137 each for option premium in addition to the potential delta in stock price to roll out just a little. Seems worth it to me for 1 month, although it does tie up your underlying. When would you say is the best time to do this roll on an ITM call to maximize benefit and minimize assignment risk? Is there never assignment risk at $0.50 or $1.00 extrinsic value on something over 10DTE for instance?
Do you use Fidelity as a checking account? I’m looking for a one stop shop to do all my banking in and I see Fidelity offers ATM and bill pay.
VERY HELPFUL THANKS JOE!