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Calculating Our Rolling-Out Trades: 2 Approaches Using the BCI Trade Management Calculator (TMC)

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When we roll-out our covered call writing trades, the initial strike is in-the-money (ITM) as expiration is approaching and we made a decision to retain the underlying security for the next contract cycle. We have maximized our initial contract return and are initiating a new trade with a later-dated expiration. This article will analyze 2 methods of entering these trades into our TMC.

Hypothetical rolling-out-and-up trade

  • 10/23/2023: Buy 100 x BCI at $24.00
  • 10/23/2023: Sell-to-open (STO) 1 x 11/17/2023 $25.00 call at $1.00
  • 11/17/2023: BCI trading at $30.80 on expiration Friday
  • 11/17/2023: Buy-to-close (BTC) the 11/17/2023 $25.00 call at $5.83
  • 11/17/2023: STO 1 x 12/15/2023 $30.00 call at $2.00 (rolling-out-and-up to an ITM strike)

2 approaches to archiving and calculating these rolling-out-and-up trades

  • We can enter the $5.83 BTC debit in the 1st or 2nd contract cycle
  • If we enter the debit in the 2nd cycle (12/15/2023 expiration), we will get an accurate maximum return result for the original (11/17/2023 expiration) contract but skewed exit strategy stats in the next cycle that will require manual adjustments. In this scenario, we enter the premium as a net debit of $3.83 ($5.83 – $2.00) in the latter dated expiration (12/15/2023)
  • If we enter the $5.83 debit in the 1st cycle (11/17/2023 expiration), the results will not reflect a maximum return in the initial trade, but will give accurate data and exit strategy statistics in the next contract cycle (12/15/2023 expiration)
  • Both approaches will result in an accurate 2-contract combined total result. It’s simply a matter of trader preference

Approach # 1: BTC debit entered into 2nd contract cycle (12/15/2023 expiration)

  • A maximum 1st contract cycle return of 8.33% is unrealized at that point in time (shares not yet sold)
  • A note is made in the trade journal, indicating a rolling-out-and-up to an ITM strike trade
  • The BCI Trade Management Calculator (TMC) is used for these computations

Entries into the next contract cycle

  • In the 12/15/2023 cycle, a net option debit of $3.83 is entered
  • This results in a total option debit of -15.32% and an unrealized share gain of $5.00 ($500.00 per-contract)
  • This results in a net credit of $117.00 per-contract
  • Since a negative option premium is entered, exit strategy buyback price points will need to be manually adjusted, based on the $2.00, 2nd contract premium (red arrows on bottom)

Approach # 2: BTC debit entered into 1st contract cycle (11/17/2023 expiration)

  • #1: Initial trade entries
  • #2: Initial trade returns with upside potential
  • #3: BTC debit entered with current market value noted
  • #4: Final 1st contract results reflect a negative option return and an unrealized share gain, netting a total unrealized return of 8.21%

Calculations in the next contract cycle

  • Current share price (at the time of the roll) and 2nd contract premium ($2.00) are entered
  • Calculations proceed normally, reflecting an initial time-value return of 4.00% with downside protection of 2.60%, since an ITM strike is used
  • The exit strategy buyback price points (green arrows) are accurate and do not need manual adjusting


There are 2 methodologies for archiving and entering our covered call writing rolling-out trades. The first involves entering our BTC option debit in the latter contract cycle. This will result in an accurate reflection of a maximum return in the first contract but will require adjustments of exit strategy price points in the 2nd contract cycle.

In the 2nd approach, we enter the BTC debit in the 1st contract cycle, which will result in an option reduction and an unrealized share appreciation. There will be no need to adjust exit strategy buyback price points in the next contract cycle.

Both methods work and both will produce an accurate representation of the total 2-contract results. It’s simply a matter of investor preference.

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10 Responses to “Calculating Our Rolling-Out Trades: 2 Approaches Using the BCI Trade Management Calculator (TMC)”

  1. Barry B June 1, 2024 9:56 pm #

    Premium Members,

    This week’s Weekly Stock Screen And Watch List has been uploaded to The Blue Collar Investor Premium Member site and is available for download in the “Reports” section. Look for the report dated 05/31/24.

    Be sure to check out the latest BCI Training Videos and “Ask Alan” segments. You can view them on The Blue Collar YouTube Channel. For your convenience, the link to the BCI YouTube Channel is:

    Reminder: Premium Member’s pricing is locked into your current rate and you will never see a rate increase as long as the membership remains active.

    Important: The Weekly Stock Report for Friday, June 7th will be published on Monday, June 10th.

    Barry and The Blue Collar Investor Team

  2. Herb June 2, 2024 5:04 am #


    What is the best timing for entering a weekly trade, Friday or Monday?

    Any advice is appreciated.


    • Alan Ellman June 2, 2024 12:21 pm #


      There is no significant advantage to entering a weekly trade on Friday as market-makers factor in weekend Theta (time-value erosion) on Thursday or Friday. We are also subjecting ourselves to weekend risk.

      I enter my weekly trades on Monday between 11 AM ET and 3 PM ET to avoid early and late institutional computerized trading volatility.


  3. Mark June 2, 2024 1:27 pm #

    Hi Alan,

    I am looking at using weeklies in one of my portfolios. I have searched the site but cant find much on exit strategies with weeklies.

    I assume they are all valid exit strategies for puts and calls except the 10% / 20% buyback, which I assume are for monthlies only.

    I did wonder if the 10% guideline was still valid as the weekly options are akin to the final week of a monthly?

    Do you use some other measure entirely to determine buyback price on weeklies for automation?

    Kind Regards


    • Alan Ellman June 3, 2024 6:43 am #


      Regarding the 20%/10% guidelines for covered call writing, 20% applies to the first half of a monthly contract and 10% applies to the last 2 weeks of the monthly contract. These limit orders assist in protecting us from share price decline.

      10% also applies to weekly covered call contracts.

      We also have 20%/10% guidelines for cash-secured puts. Those apply to scenarios when share price accelerates significantly.


  4. John June 3, 2024 5:48 pm #


    In several chapters in your books, there is often a statement to sell a call into the next month based on the underlying meeting system criteria both fundamentally and technically.

    The ‘fundamentally’ has me confused. For example, from the Encyclopedia I pulled this excerpt, “ It had a mixed chart pattern and potentially was a viable candidate for such strategies due to its strong fundamentals”.

    As a person that relies on the weekly Premium member report, I know that BCI screened the stock’s fundamentals already. But on Expiration Friday, I don’t have up to date reports, or Smart Select.

    So can you clarify a bit about the process for evaluating fundamentals on Expiration Friday? I’m drawing a blank. Please LMK if I’m missing something.



    • Alan Ellman June 4, 2024 6:39 am #


      Good question.

      If a strike is expiring in-the-money and we are considering rolling the option to the next contract cycle, we can assume the chart technicals will still meet our system criteria.

      Now, the main cause of fundamental breakdown is a disappointing earnings report. In our BCI methodology, we avoid earnings reports. If there is an ER due out in the next contract cycle, we wouldn’t use that security.

      Bottom line: If a strike is expiring ITM and there is no upcoming ER, we can feel comfortable rolling the option.


      • John June 4, 2024 7:35 am #


        So if on Monday for some reason the stock was not qualified for the watch list ( possible but not common) we would manage the trade anyway considering we have additional downside protection?

        • Alan Ellman June 5, 2024 6:01 am #


          You are 100% correct.


  5. Alan Ellman June 5, 2024 4:48 pm #

    Premium members:
    This week’s 4-page report of top-performing ETFs, along with our sample trade of the week, has been uploaded to your premium site. The Select Sector SPDR section is now crafted to align with our streamlined (CEO) approach to covered call writing. The report also lists Top-performing ETFs with Weekly options, mid-week market tone as well as the implied volatility of all eligible candidates.
    Premium member video link:

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

    NOT A PREMIUM MEMBER? Check out this link:

    Alan and the BCI team

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