My Covered Call is Expiring In-The-Money and I Want to Keep My Shares

My Covered Call is Expiring In-The-Money and I Want to Keep My Shares

Jul 13, 2024 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

click ↑ 4 Featured Covered call writers will frequently find themselves in a position where the short call is expiring in-the-money (ITM), while still wanting to use the same underlying shares for the next contract cycle. How should this be managed? 3-approaches...
Should I Close My ATM Covered Call with 2 1/2 Months Until Contract Expiration?

Should I Close My ATM Covered Call with 2 1/2 Months Until Contract Expiration?

Jul 6, 2024 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

click ↑ 4 Featured When our covered call writing trades move deep in-the-money (ITM), the time-value cost-to-close approaches (but does not reach) $0.00. In these scenarios, it may make sense to close both legs of the trade (mid-contract unwind or MCU exit strategy)....
I Made a Lot of Money, So Why Am I Crying?

I Made a Lot of Money, So Why Am I Crying?

Jun 22, 2024 | Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

click ↑ 4 Featured Covered call writing trades have 2 components: we are long the stock and short the option. When evaluating the success or lack thereof for our trades, we must factor in both legs of the trade. In this article, we will analyze an example of how we...
Calculating Our Rolling-Out Trades: 2 Approaches Using the BCI Trade Management Calculator (TMC)

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

Jun 1, 2024 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

click ↑ 4 Featured 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...