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Rolling-Out-And-Up to In-The-Money Strikes

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Using covered call writing exit strategies is an essential skillset needed to achieve the highest possible returns. The calculations for rolling-out-and-up to in-the-money call (ITM) strikes is a bit more complicated than some of our other exit strategies. This article will analyze a real-life example using United Therapeutics Corp., Inc. (Nasdaq: UTHR).

What is rolling-out-and-up?

We close the near month ITM call and sell a later-dated, higher strike that is lower than current market value.

When do we consider this exit strategy?

The current strike is ITM and the security still meets our system requirements (including no upcoming earnings reports). The calculations must meet our pre-stated initial time-value return goal, also factoring in share appreciation when rolling.

Real-life trade with UTHR

  • 2/22/2021: Buy 100 x UTHR at $155.90
  • 2/22/2021: STO 1 x 3/19/2021 $150.00 (ITM) call at $9.25
  • 3/19/2021: UTHR is trading at $163.22
  • 3/19/2021: Buy-to-close (BTC) the $150.00 call at $15.50
  • 3/19/2021: Sell-to-open (STO) the 4/18/2021 $160.00 call at $9.50
  • We have now rolled-out-and-up to an ITM call, as $160.00 is lower than the current market value of $163.22

Initial trade entries and calculations with the BCI Trade Management Calculator (TMC)

  • Initial time-value return is 2.23%, 31.35% annualized
  • There is 3.78% downside protection of the initial 2.23% profit

Rolling calculations for the current month prior to rolling the option

  • Prior to rolling, shares can only be worth $150.00, the ITM strike or our contract obligation to sell
  • The final pre-roll return is 2.15% (option credit of 5.93% and a stock debit of 3.78%)
  • Final returns are based on the cost of the shares; initial returns are based on the ITM strike price. The rationale is explained in detail in my books & videos and beyond the scope of this article

Trade entries and initial calculations of the rolling trade in the next contract cycle (4/18/2021 expiration)

  • Value of the stock is $150.00, the previous contract obligation to sell
  • There is an option debit of $6.00 ($15.50 – $9.50) or 4.00%
  • Shares have an unrealized gain of $10.00 per-share ($160.00 – $150.00) or 6.67%
  • The maximum return for the next cycle is 2.67% (6.67% – 4.00%)


When rolling-out-and-up to ITM strikes, we close the first contracts using the ITM strike as the final stock value. The same strike is used as the starting stock value for the next contract cycle, factoring in the option credit/debit and the unrealized “bought-up” value of the shares ($150.00 to $160.00, in this example). Rolling-out is almost always to ITM strikes but rolling-out-and-up can be to ITM, ATM or OTM strikes.

Stock Repair Calculator

What is the stock repair strategy?
  • Own shares at a price higher than current market value (unrealized loss)
  • Willing to forego potential profit in exchange for lowering the breakeven price point
  • Not willing to add additional funds to the current losing position
  • Instead of buying shares at the lower price to “average down”, an at-the-money (near-the-money) call option is purchased and funded by selling 2 out-of-the-money call options
  • 2 long positions (stock and ATM or NTM call)
  • 2 short positions (OTM calls covered by long positions)
  • This action will lower the breakeven price point
  • The strategy does not protect against additional downside loss
  • The strategy does cap the upside

Click here to learn more and order.

Your generous testimonials

Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to share some of these testimonials in our blog articles. We will never use a last name unless given permission:


I continue to immerse myself in all my BCI premium membership offers. I now see so many people on You Tube offering information (not necessarily helpful or correct) on covered calls.

I often see someone with hundreds of thousands of views, but it doesn’t explain, or give a true realistic view of covered call writing.

But you and Barry offer:

  1. The pros in cons view with all your educational material, I see others push say PMCC concepts and act like there is no cons. That is scary and disappointing.
  2. Free resources that help new traders, yes, we have premium resources (I am enjoying) , but the free resources can get you started.
  3. Real life examples and years of trading experience.
  4. A personal touch , answer email questions, un published discounts when I have requested i.e.; calculators, reference books.
  5. An honest no nonsense approach , no gimmicks……

There is so much more but this is the coolest part of the email. I continue to learn and started using Microsoft edge with the chat gpt (Artificial  Intelligence ) feature.

I wanted to see if its answers were bias and pushed information from bigger websites ect. Searches are very different and the references when I asked how delta works with  covered call writing.

The final result is AI scouring the web and gives a relative answer and lists references. The whole answer is not listed, but it quotes the Blue Collar Investor and cites you in the screen shot I enclosed below.

Hopefully others can see all you have to offer with the BCI methodology. I write these emails often because you seem to always turn questions from your members into this great database of investing knowledge in the stock market, calculators, reports, etc.

I can’t wait to see how all this new technology automates and grows the Blue Collar Investor.  I am growing in the CEO of my own money, and I honestly use all my BCI resources and my follow up homework on these subjects to make my investment choices. I am really becoming very successful, and I thank you.


Upcoming events

1. BCI-Only Webinar

Thursday April 11, 2024

8 PM ET – 9:30 PM ET

Ultra Low-Risk Approaches to Covered call Writing and Selling Cash-Secured Puts

Adding Delta and Implied Volatility to existing defensive concepts


Covered call writing and selling cash-secured puts are low-risk, option-selling strategies focused on generating cash-flow. Our trades can be structured to represent aggressive or defensive postures or somewhere in between.

This presentation will detail how to structure our trades to decrease risk, particularly in bear and volatile market conditions while still generating significant returns. It will also be of interest to investors who have a low personal risk-tolerance but still want to generate higher than risk-free returns.

Both Delta (an option Greek) and implied volatility will be spotlighted, and real-life examples will be utilized to demonstrate the process of establishing these conservative trades, while still allowing us the potential to generate significant annualized returns.

A comparison of these ultra-low risk returns will be compared to those of traditional option-selling, using real-life examples.

At the end of the online seminar, Alan & Barry will respond to all questions related to covered call writing and cash-secured puts.


Zoom Meeting ID, passcode, and direct link will be sent via email to those who register using the link below on Wednesday, April 10, 2024, the day before our online, education event goes live. A final reminder that also includes the Zoom login information will be emailed about 2 hours before the event begins. Only registrants receive a day-of-event reminder.

For those who register you will also receive the following benefits:

  • Unique opportunity to ask questions during the Live Q&A that will immediately follow the presentation.
  • Unlimited access to a replay of the webinar (link sent via email shortly after the event has concluded).
  • A bonus gift (emailed along with the replay link) of BCI’s highly popular, 40-page e-book, entitled…

Selling Cash-Secured Puts for Beginners The E-Book

Investing To Generate Monthly Cash Flow


All questions related to covered call writing and cash-secured puts will be answered in real time after the webinar presentation.

2. Stock Traders Expo- live event in Orlando Florida

October 17 -20

Details to follow.

3. Coming Soon From BCI…

· The Blue Collar Investor Conservative Credit Spread Trading System

· We Are Introducing Our Credit Spread Trading Methodology Following BCI Conservative Trading Principles

· The System Includes:

o Bull Put Calculator

o Bear Call Calculator

o Expected Price Movement Calculator – That Will help To Determine High Probability Short Leg and Long Leg Positions of The Credit Spread

o An Extensive Credit Spread Trading Journal

· A New Approach to User Guides…Detailed Context Specific Cell Descriptions and Guidelines…For Both Data Entry and Calculated Results

If you are interested in learning more or want early access to our new system, please send an email to Barry Bergman at:

[email protected]

Alan speaking at a Money Show event********************************************************************************************************************

10 Responses to “Rolling-Out-And-Up to In-The-Money Strikes”

  1. Otto March 30, 2024 7:39 am #


    I’m looking forward to your webinar on April 11th. My problem is that I may have to work that night. Will there be a recording and if so how do I get it?

    Thank you.


    • Alan Ellman March 30, 2024 11:18 am #


      Everyone who registers will receive a link to the recording later Thursday evening or on Friday.

      Only those who attend the live event will be able to participate in the Q&A at the end of the webinar on all topics related to covered call writing and cash-secured puts.

      Our Zoom platform allows for 500 attendees, and we will have more than 500 registered, so I suggest logging in about 10 minutes early (7:50 ET), to ensure a “seat” in the room.

      Use the link in the above article to register.

      Hope to see you there.


  2. Barry B March 30, 2024 9:41 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 03/28/24.

    Also, 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 will never see a rate increase as long as the membership remains active.

    Have a Happy Easter,

    Barry and The Blue Collar Investor Team

  3. Penny March 31, 2024 3:08 am #


    I have a crazy question.

    If we have a market crash leading to a long term bear market, what kind of returns can we expect using the inverse etfs from our weekly etf reports (rwm etc.). I know we’re in a bull market, just thinking ahead.

    Thank you.


    • Alan Ellman March 31, 2024 8:04 am #


      In our BCI community, no question is “crazy”, all are important.

      Using the 4 Inverse ETFs we provide in our weekly Premium member ETF Reports, we can expect annualized returns on the option side of between 7% – 15%.

      There also will be additional upside potential of between 12% – 30% annually.

      Hopefully, we will not experience another confirmed bear market for a long time (I agree, we are in a bull market now), but, if we do, we can definitely turn to these Inverse ETFs.


  4. Bob March 31, 2024 12:37 pm #

    Alan and Barry

    Longtime subscriber and owner of all the books here.

    Only thing missing is your trades based on the weekly recommendations. I would really appreciate the ability to follow what you do and possibly replicate.

    • Alan Ellman April 1, 2024 11:31 am #


      Thank you for your long-term BCI premium membership.

      Over the years, I have published or produced >700 journal articles, > 500 videos, 6 online courses, 9 books and nearly 200 podcasts, most showing real-life trades taken from my personal portfolios. Hundreds involve weekly options.

      The reason I choose not to share my personal portfolios in real-time is that members will simply “do what Alan does” rather than do the due-diligence required to learn how to master the strategies and then craft them to their personal trading style and risk-tolerances. What’s right for me, may or may not be right for others. As an example, I trade differently in my portfolios than I do in my mother’s.

      That said, in my 9th book, “Covered Call Writing: A Streamlined Approach”, I did archive every trade I executed in my CEO Portfolio for the calendar year 2022, with broker screenshots, explaining why every trade was executed and how to manage them.

      My goal is that sharing my 30 years of options trading experience with our BCI community will not only assist our “family” in generating higher results but also have a positive impact on the lives of our members.


  5. Barry G April 1, 2024 11:04 am #


    When setting up the 20%-10% limit orders after entering a covered call trade for in the money strikes, do we use the entire premium or just the time value portion to determine the amount of the limit order? I hope this makes sense.

    Barry G

    • Alan Ellman April 2, 2024 12:05 pm #


      It, definitely, makes sense and it’s a great question.

      The answer is the 20%/100% guidelines are based on the entire premiums, whether ITM, ATM or OTM.

      This has to do with Delta and the amount an option will decline in relationship to share price. It we based these guidelines on time-value only for ITM call strikes, we would not have time to react in an expeditious timeframe.


  6. Alan Ellman April 3, 2024 4:41 pm #

    Premium members:

    This week’s 4-page report of top-performing ETFs 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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