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Analyzing the Pros & Cons of Rolling-Up a Covered Call Trade + Expected Price Movement Calculator Now Available

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There are times when our covered call writing trades turn out much better than anticipated, and share price rises exponentially after trade entry. Barry R. shared with me a series of trades he executed with E.L.F. Beauty, Inc. (NYSE: ELF), where the original out-of-the-money (OTM) strike ended up deep ITM, early in the contract cycle. This article will evaluate the benefits and risks of rolling the strike up in the same contract cycle. We will utilize the BCI Trade Management Calculator (TMC) for our calculation results.

Barry’s ELF trades

  • 4/10/2023: Bought 600 shares ELF at $83.45
    4/10/2023: STO  6 x 5/19/2023 $85.00 calls at $3.70
    4/20/2023: BTC 6 x 5/19/2023 $85.00 calls at $11.90
    4/20/2023: STO 6 x 5/19/2023 $95.00 calls at $4.60
    4/20/2023:  ELF stock trading at $95.20

We will calculate 3 scenarios:

  • Current trade status without rolling-up
  • Rolling-up with stock price closing above the 2nd strike ($95.00)
  • Rolling-up with stock price closing at $90.00

Current trade status with no rolling-up (initial calculations with price at $95.20)

  • Yellow cell (top): Breakeven price point
  • Brown cells: Initial time-value returns & annualized based on a 40-day trade
  • Purple cell: Additional upside potential if share price moves up to the $85.00 strike
  • Yellow cells (bottom): Exit strategy price points
  • Maximum return with no exit strategies: 4.43% + 1.86% = 6.29%
  • With stock price at $95.20 on 4/20/2023, the trade has 10.7% protection of this max return (price can decline to the $85.00 strike and still result in a maximum return)

Trade status if strike is rolled-up (same expiration) and is priced >$95.00 at expiration

  • Note the spreadsheet shows “rolling-out-and-up, not “rolling-up” This is because in the BCI methodology, we rarely roll-up in the same contract cycle. However, the math will work. In the next screenshot, note that we can make the appropriate notation in the TMC Trade Journal
  • Brown cells: A net loss on the option side of 4.31%
  • Yellow cells: A net gain on the stock side of 13.84%
  • Pink cells: The combined net gain is 9.53%, an improvement of 3.24% from the max return without exit strategy implementation

Trade status if strike is rolled-up (same expiration) and is priced $90.00 at expiration

  • Brown cells: A net loss of 4.31% on the option side
  • Yellow cells: A net gain of 7.85% on the stock side
  • A combined net gain of 3.54% for the rolled-up trade
  • This represents a decline of 2.75% from the max gain of 6.29%


In the BCI methodology, we rarely will roll-up our covered call trades in the same contract cycle after significant share price acceleration. Our concern is related to possible price decline due to profit-taking. Instead, we may look to our “mid-contract unwind” exit strategy for possible trade adjustments. In Barry’s series of trades, my preference would be to take no action and continue to monitor this highly successful (to date) series of trades.

BCI Expected Price Movement Calculator Now Available

The Expected Price Movement Calculator is designed to generate an approximate projected trading range for the underlying security, specific for selected contract expiration date. The at-the-money implied volatility (IV) of the stock or ETF (exchange-traded fund) is used to achieve this valuable information.

Inherent in the spreadsheet is a conversion formula that recalibrates the annualized IV stat into one specific for the contract being traded. Easily accessed option-chain data is entered into the white cells at the top of the spreadsheet and calculations will appear in the yellow cells below.

This tool will yield upper and lower ends of the trading range during the option contract being traded with an approximate 84% probability of accuracy. Watch this video for more information:

To purchase the BCI Expected Price Movement Calculator, click here.

Your generous testimonials

Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to share some of these testimonials in our blog articles. We will never use a last name unless given permission:

Hello Alan and Barry,

I very recently learned about your company and really liked what I saw in your free videos.  I was so impressed that I jumped in and purchased your full package (please see email with order info below).  I’m completely new to the market (other than my 401K), so I know I have a lot of learning to do.  I liked your approach, not only to investing but also to teaching, so my first investment is in you.  I believe in you, and I think I’ve invested wisely, and I should now have everything that I need to get educated in this area and use my newfound knowledge, along with your reports and guidance, to ease my way into retirement (I’m 63). I know that I made the right choice.

I wanted to thank you for your help and guidance.  You are very much appreciated.

Regards, Mike

Upcoming events

1. Orlando Money Show Live Event

45-minute workshop: Monday October 30th 2:10 PM ET – 2:55 PM ET

Selling Cash-Secured Puts and Strategy Choices After Exercise

2-hour MoneyMasters Class: Tuesday October 31st 9:30 AM ET – 11:30 AM ET

How to Master Covered Call Writing:

A detailed start-to-finish analysis using real-life examples.

Details & Registration information here.

2. BCI-only free webinar (all invited up to our 500 Zoom maximum)

Thursday November 9, 2023

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Zoom link will be sent to all on our mailing list as event approaches.

Join our mailing list on the blog link of this site- right side scroll down.

Selling Cash-Secured Puts: Multiple Applications

Selling cash-secured puts is a low-risk option strategy geared to generating cash-flow, but always with capital preservation in mind.

This presentation will detail the strategy, incorporating the 3-required skillsets necessary to achieve the highest levels of returns … stock selection, option selection and position management.

If and when we allow exercise of the put options, shares are put to us at a price we agreed upon. What is our next step? This seminar will discuss potential paths we can take and the rationale behind these decisions, using real-life examples and calculations.

Q&A will include covered call writing, cash-secured puts and related strategies.

Zoom link will be sent to all on our mailing list as event approaches.

3. AAII Orange County, California Chapter

AAII Investment Club members only

Saturday November 11, 2023

Details to follow.

4. Long Island Stock Traders Meetup Group

Thursday February 15, 2024

7:30 PM ET – 9:00 PM ET.

Details to follow.

Alan speaking at a Money Show event*********************************************************************************************************************

11 Responses to “Analyzing the Pros & Cons of Rolling-Up a Covered Call Trade + Expected Price Movement Calculator Now Available”

  1. Marty October 7, 2023 12:52 pm #


    I noticed that a few of the etfs in the reports do not have at least 100 contracts of open interest.

    Please explain why they are listed as “eligible” given that they don’t meet this requirement. I love all the information in your reports so I feel like I must be missing something.


    • Alan Ellman October 8, 2023 6:37 am #


      When we analyze option liquidity while crafting our premium member ETF reports, we look at 2 factors:

      1. Open Interest: We require at least 100 contracts of OI.

      2. Bid-ask spreads: Our guideline here, is a “bid-ask spread of $0.30 or less”.

      If a security has < 100 contracts of OI and is still on our ETF Report, that means the bid-ask spread was reasonable for successful trading and also provides an opportunity to generate meaningful premiums. This data is as of the report date and could change, so we ask our members to re-check option-chains prior to entering all trades. Alan

      • Marty October 8, 2023 7:44 am #

        Thanks, Alan,

        I now understand, it makes sense.

        If I can, I’d like to ask another question. In our stock reports, there are columns for beta and ATM IV%. What is the best way to interpret and use these statistics?

        I appreciate the time you take to answer these questions.


        • Alan Ellman October 8, 2023 11:45 am #


          The historical volatility (beta) and implied volatility statistics, give us a framework to determine potential risk and returns of our covered call writing and put-selling trades.

          Let’s look at VERX from the report published last night.

          The beta = 1.30. This means that if the market rises or falls by 10% over the next year, VERX is expected to rise or fall by 13%, based on the historical volatility.

          The ATM IV = 45.2%, about 2 1/2 times that of the S&P 500. This tells us that we are incurring moderate risk and anticipate better-than-average initial premium returns.

          Our members have asked for both stats over the years and that’s why we include both in our stock reports. My preference is IV because it is based on current option pricing in the marketplace as opposed to data from the past.


  2. Alan Ellman October 7, 2023 10:43 pm #

    Premium Members,

    This week’s Weekly Stock Screen And Watch List has been uploaded to The Blue Collar Investor Premium Member site and is available for download in the “Reports” section. Look for the report dated 10/06/23.

    Also, be sure to check out the latest BCI Training Videos and “Ask Alan” segments. You can view them on The Blue Collar YouTube Channel. For your convenience, the link to the BCI YouTube Channel is:

    Reminder: Premium Member’s pricing is locked into your current rate and will never see a rate increase as long as the membership remains active.


    Barry and The Blue Collar Investor Team

  3. Barbara October 8, 2023 11:29 am #

    Dear Alan,

    I just finished your new book, and I had a question.

    Should an investor using this new strategy ever sell or stop loss an ETF when the market is down a certain amount?

    This question came to mind at this time because the market is currently in a bearish trend, and of course, I am down in my ETFs.

    Thank you for your help,

    • Alan Ellman October 9, 2023 8:01 am #


      Despite some claims, there is nobody who can consistently and accurately predict market movement over time. There are too many factors impacting the market in our global economy. The unexpected, horrific events in Israel are perfect examples.

      In the CEO strategy detailed in my latest book, we always have our 20%/10% guidelines in place. If those thresholds are breached, and the short calls are closed, we can wait to “hit a double” or roll-down, depending on the time remaining until contract expiration. This is the strategy blueprint detailed in the book.

      Now, can an investor expand on the number of exit strategies implemented? Yes.

      In my 8th book, “Exit Strategies for Covered Call Writing and Selling Cash-Secured Puts”, there are 14 covered call writing exit strategy opportunities described with real-life examples.

      In the new book, we use only 4 of those 14 exit strategies. An investor can consider anywhere from these 4 up to all 14.

      I have multiple option-selling portfolios. Calls & puts. Weeklys and Monthlys. One portfolio is dedicated to the CEO strategy, where I consider only the 4 described in the book.


  4. Alan Ellman October 9, 2023 4:59 pm #

    Premium members:

    This week’s 4-page report of top-performing ETFs has been uploaded to your premium site. The Select Sector SPDR section is now crafted to align with our streamlined (CEO) approach to covered call writing. The report also lists Top-performing ETFs with Weekly options, mid-week market tone as well as the implied volatility of all eligible candidates.

    Premium member video link:

    For your convenience, here is the link to login to the premium site:

    NOT A PREMIUM MEMBER? Check out this link:

    Alan and the BCI team

  5. Jeff October 10, 2023 7:12 am #


    I recently joined your premium membership and have a question about the stock report that just came out.

    I’m interested in VERX and see you have it in bold in the first column. Does this mean you recommend it more than the others? Should we focus mainly on these bold stocks.

    Thanks a lot.


    • Alan Ellman October 10, 2023 11:13 am #


      The stocks in our report are “eligible” securities, not specific recommendations. Some stocks are appropriate for certain investors, but not for others. For example, a stock may be too expensive or too volatile for some but perfect for others. These are just 2 examples.

      Now, stocks listed in bold, have all 4 technical parameters currently bullish. In the screenshot below, note:

      #1: Bullish exponential moving averages, trend indicators.

      #2: Bullish MACD histogram (blue bars above the zero line), a trend and momentum indicator.

      #3: Bullish (ascending) stochastic oscillator (black line), also a momentum indicator.

      #4: Robust volume, confirming the other indicators and eliminating negative volume divergence from our analysis.

      We tend to favor “bold” stocks, but all securities in the white cells are eligible and should be considered.



  6. John October 11, 2023 1:11 pm #

    Trade Management Calculator:

    Alan & Barry,


    The power wrapped in a simple user experience…..This calculator was a must have for me to dive deeper into the BCI methodology.

    I have a greater understanding of my trades .

    Mixing more in the money calls , and having even more success.

    All winning trades so far using my new powerful tool .

    Appreciate what you continue to do for my investing education .


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