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Ask Alan #164 I Can’t Make Much Money Rolling-Out but Want to Keep My Stock

Alan answers a question posed by Doug, who asks:

Alan,
Alan, I’m having trouble with the following trade: On 6/10 I bought GDX for $22.37 and sold the July $24 strike for $0.24. On 7/12 GDX is at $26.21 and the cost to buy back the option is $2.21 (no time value left). I want to keep this ETF. Rolling out to the August $24 strike only nets $2.39. This seems anemic and rolling out-and-up seems even worse with lower premiums. Considering I want to keep the stock, I’m not sure the best course. Thanks, Doug

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It’s the 2nd Wednesday of the month. Time for another original episode of Ask Alan. AA#164, “ I Can’t Make Much Money Rolling-Out but Want to Keep My Stock”

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About Alan Ellman

Alan Ellman loves options trading so much he has written four top selling books on the topic of selling covered calls, one about put-selling and a sixth book about long-term investing. Alan is a national speaker for The Money Show, The Stock Traders Expo and the American Association of Individual Investors. He also writes financial columns for both US and International publications along with his own award-winning blog.. He is a retired dentist, a personal fitness trainer, successful real estate investor, but he is known mostly for his practical and successful stock option strategies.

4 Responses to “Ask Alan #164 I Can’t Make Much Money Rolling-Out but Want to Keep My Stock”

  1. Alan Ellman November 13, 2019 5:30 pm #

    Premium members:

    This week’s 8-page report of top-performing ETFs and analysis of ALL Select Sector Components has been uploaded to your premium site. The report also lists Top-performing ETFs with Weekly options as well as the implied volatility of all eligible candidates.

    New members check out the video user guide located above the recent reports.

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

    https://www.thebluecollarinvestor.com/member/login.php

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    https://www.thebluecollarinvestor.com/membership.shtml

    Alan and the BCI team

  2. Hoyt T November 15, 2019 4:19 pm #

    Just happened to notice that there was an additional post on the previous blog and thought maybe it should be posted here.

    Barry, if I shouldn’t have done this I am soory.
    Hoyt

    Barry B
    November 15, 2019 2:35 pm
    Reply
    #
    Premium Members,
    The Weekly Report may be delayed until Sunday morning due to systems work being done by Schwab. The message that I received from Schwab this afternoon is as follows:
    “To ensure we’re delivering the best experience possible, we’ll be conducting routine systems maintenance on Friday, November 15 at 10:00 PM ET through 3:00 AM ET Sunday, November 17. During this time some functionality may be intermittently slow or unavailable. We apologize for any inconvenience.”
    Best,
    Barry and The Blue Collar Investor Team

    • Alan Ellman November 16, 2019 7:37 am #

      Hoyt,

      Thanks very much for this re-post.

      Alan

  3. Ronald November 18, 2019 8:41 am #

    Well explained. In fact, I faced this identical situation with a BK call that the stock surpassed, and by “intuition” I decided to close out the option on a day when the stock followed a weak market and take time to reevaluate the options going forward. The strength in the banking sector helped me make that decision.

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