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Ask Alan 183: Analyzing the Cost-To-Close When a Strike Moves Deep In-The-Money

Alan answers a question posed by Mark, who asks:

I am confused by the math when my stock rises a lot. I bought SEDG for $94.27 and sold the $90.00 call for $6.30. The stock moved up to $104.85 and the option is $14.90. If I buy back to option, do I lose my initial premium?

It’s the 2nd Wednesday of the month. Time for another original episode of Ask Alan. AA#183, Analyzing the Cost-To-Close When a Strike Moves Deep In-The-Money Become a premium member today, and tune in to the educational power of the complete library!

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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.

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