Alan answers a question posed by Edmond, who asks:
I have been writing Weekly options on Ulta Beauty, Inc. (NASDAQ: ULTA). On November 12th, I sold the $315.00 November 16th expiration option (stock price was $308.50) and on Thursday prior to expiration Friday, the value on that option declined to 10% of the sale value and was deep out-of-the-money (stock price was $309.15). Should I buy-to-close the option and sell the next week’s option on Thursday or Friday or allow the option to expire worthless and write the new option the following Monday? How much time value would I lose if I waited until Monday to sell the new call option?
It’s the 2nd Wednesday of the month. Time for another original episode of Ask Alan. AA#156, “Should I Roll My Expiring Out-Of-The-Money Weekly Option?”
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