Alan answers a question posed by Carl, who asks:
I am concerned about the cost to roll options when a stock price increases and I want to keep the stock. When I buy back an in-the-money option and roll out-and-up and then the price of the stock goes down, I am actually losing money in some cases. Should I just consider selling only deep out-of-the-money options to avoid these potential losses?
It’s the 2nd Wednesday of the month. Time for another original episode of Ask Alan. AA#146, “The Cost of Rolling Out and UP”
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