Thanks for the video. Agree with previous comment that key is to sell covered calls on underplaying securities you want to own long term. Dealing with a stock running up is frustrating in my experience, but at end day, still winning.
This is what I wish I knew when I sold a covered call on ABBV and had it assigned away from me. I really just wanted to see the option premium, not loose the shares. Thanks again.
You don't have to extend the time of a contract to roll it. You can just roll up or down, but keep the same expiration. Technically, you can also roll a contract "in" to shorten the timeframe, though that has more limited usefulness than the other three directions.
This was the most confusing thing when I started selling options, thanks for the video! I find that with weekly options I make more money to roll the options on Friday than to wait for them to expire and rewrite on Monday.
thanks for the video Joe..... this is what I've been doing with QQQ when it took a dive last week.... rolling down for a CR... creating more cashflow...then when QQQ starting going up again, rolling up and out a little to avoid assignment still for a CR.... still rolling on this one
Hey Joe, thank you for this video! Rolling calls and puts is truly an art art rather than a science it seems. Could you talk about timing strategies with rolls? How many days or hours prior to assignment do you look to roll if you are in the money?
The key is to trade around positions that you want to own long term. When the market goes down against a stock that I am selling calls on, I don’t worry because I want to own the stock longer than just a week or two. I collect the premium and I wait if it gets called away from me I don’t freak out and then I simply sell cash covered puts …maybe close to the money. I’m concentrating on collecting premium short term with long term (1 yr +) capital appreciation. I’m sure not trying to trade the underlying stocks .
Rolling CC up on the strike and rolling Puts down when strike is falling is key to saving assignments. The cost is time lost. Not sure if assignments can happen befor the expiry date?
An ITM contract can be assigned ANY time. The exception is European-style contracts (can only be exercised on expiration date) or cash-settled equities, which are never assigned.
Depends on the underlying, really. I've had a couple of them fall faster and further than I could roll. I might have been able to sit on the shares for a few months and hope it rebounded, but stagnant capital = zero growth
Hi, thank you for your video. How do we characterize the optimal roll strategy ? I t is easy to take a path leading to default. When is the optimal roll time? At which strike and maturity ? Allowing basis risk I may also change underlying, if it has the optimal correlation with current underlying. Without an optimal strategy it is not uncommon to run out of strikes and of maturities. A contingent state plan is needed to never lose. Do you have a clean audit trail of repeated rolls brought to win after an initial drawdown ?
Can someone explain this from the other side of the contract? If I've got a contract to buy shares at a certain price and the value goes above that price, why would i agree to extend the contract?
As an option buyer, you're not extending the contract. The obligation to sell you the shares at that price just changed hands. Someone else will fulfill the obligation and will be assigned.
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Happy Friday Everybody!! Make sure to leave your $0.02 in the comments! Have a great weekend! =)
Thanks for the video. Agree with previous comment that key is to sell covered calls on underplaying securities you want to own long term. Dealing with a stock running up is frustrating in my experience, but at end day, still winning.
This is what I wish I knew when I sold a covered call on ABBV and had it assigned away from me. I really just wanted to see the option premium, not loose the shares. Thanks again.
I really admire your willingness to trade options even if there are things you don't yet know.
Rolling options/contracts is simply extending the contract(s) further out in time: it's the silver bullet to writing options;)
You don't have to extend the time of a contract to roll it. You can just roll up or down, but keep the same expiration. Technically, you can also roll a contract "in" to shorten the timeframe, though that has more limited usefulness than the other three directions.
@@dustinasche What you are talking about happens about 10% of the time...the other 90 is not
@@mrpremiumoftheoption116 not really? Rolling up or down is a common way to manage positions once you get into more advanced options contract trading.
This was the most confusing thing when I started selling options, thanks for the video! I find that with weekly options I make more money to roll the options on Friday than to wait for them to expire and rewrite on Monday.
thanks for the video Joe..... this is what I've been doing with QQQ when it took a dive last week.... rolling down for a CR... creating more cashflow...then when QQQ starting going up again, rolling up and out a little to avoid assignment still for a CR.... still rolling on this one
Awesome video! Especially now that IWM is daily, rolling options is something I’ve been doing. Keep up the great content
Great video Joe. Did a lot of rolling this past week!
I asked for a vid like this maybe a week ago. Thanks, man this really helps
Still learning, keep up the good work
Hey Joe, thank you for this video! Rolling calls and puts is truly an art art rather than a science it seems. Could you talk about timing strategies with rolls? How many days or hours prior to assignment do you look to roll if you are in the money?
On fidelity it doesn't seem to show the delta/percentage of getting assigned when rolling which is annoying
Just rolled yesterday, made an ez 1k
How would rolling out an ITM contract by one day avoid assignment? If it’s ITM, it can be exercised ANY day (except European & cash-settled).
Thanks man great info
The key is to trade around positions that you want to own long term. When the market goes down against a stock that I am selling calls on, I don’t worry because I want to own the stock longer than just a week or two. I collect the premium and I wait if it gets called away from me I don’t freak out and then I simply sell cash covered puts …maybe close to the money. I’m concentrating on collecting premium short term with long term (1 yr +) capital appreciation. I’m sure not trying to trade the underlying stocks .
I tend to sell my Options weekly and target a Strike price that I don't mind assignment. I only roll if I end up below cost in a falling market.
Rolling CC up on the strike and rolling Puts down when strike is falling is key to saving assignments. The cost is time lost. Not sure if assignments can happen befor the expiry date?
An ITM contract can be assigned ANY time. The exception is European-style contracts (can only be exercised on expiration date) or cash-settled equities, which are never assigned.
Great explanation.
Always useful information. Thanks
Depends on the underlying, really. I've had a couple of them fall faster and further than I could roll. I might have been able to sit on the shares for a few months and hope it rebounded, but stagnant capital = zero growth
Hi, thank you for your video. How do we characterize the optimal roll strategy ? I t is easy to take a path leading to default. When is the optimal roll time? At which strike and maturity ? Allowing basis risk I may also change underlying, if it has the optimal correlation with current underlying. Without an optimal strategy it is not uncommon to run out of strikes and of maturities. A contingent state plan is needed to never lose. Do you have a clean audit trail of repeated rolls brought to win after an initial drawdown ?
Consider rolling when the breakeven price is less than the current market price.
How far away are you Joe from the big road trip?
Thank you Joe for the video. Have a question do you buy to close at any time or the day of expiration. Or a day. Before expiration. Thank you.
Interested in higher IV stocks and etfs like TQQQ.
Can someone explain this from the other side of the contract? If I've got a contract to buy shares at a certain price and the value goes above that price, why would i agree to extend the contract?
As an option buyer, you're not extending the contract. The obligation to sell you the shares at that price just changed hands. Someone else will fulfill the obligation and will be assigned.
Rolling for a debit when you can roll up and out as much as you need makes no sense imo.
Yeah works until it doesn’t
2 cents