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When our covered call strikes are in-the-money as expiration approaches, we can avoid exercise by rolling the option. We can roll-out to the next month same strikes or roll-out-and-up to the next month higher strike. We always roll-out to an in-the-money strike but can roll-out-and-up to an in-the-money, at-the-money or out-of-the-money. BCI calculators will run the returns gleaned from option-chain information.
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My experiments with rolling out or out and up did not go well.
The problem, for me, is that on expiry Friday, there is no BCI Stock Screen to validate my expectations, and also, the stocks which increased in that period have a tendency to pause and decline in the new cycle.
Another factor to remember is that we must divide our gains by two, even when successful.
I prefer to be assigned and start from scratch on Monday with a fresh Stock Screen and the market indicating the tendency.
I am aware of the lost opportunities, but I feel better safe than sorry.
Rolling exit strategy opportunities will present frequently. It’s up to us to evaluate the pros and cons of executing these trades versus “allowing assignment” Not every opportunity translates into action.
One disadvantage of rolling, as you point out, is that we don’t have the availability of the upcoming weekend premium stock report to compare to other potential trades. On the other hand, rolling will avoid having to add additional cash to the trade should share value accelerate by Monday.
There is no right or wrong here as long as we have the ability to evaluate the advantages and disadvantages of both approaches.