The price has climbed to $34.06, so I decided to roll up again. Am I rolling too often? It doesn't seem to be hurting the aXIRR or aROI, but I haven't seen a decline yet either. But it seemed like a good move to up the strike price by $5 for a net cost under $2.
I did run into a problem on this transaction. I bought back the Feb 2009 $30 fine, but when I went to sell the Feb 2009 $35, the Wells Fargo interface wouldn't accept my order. I had to call a service rep to have them put in the order. By the time they got the order in, my original limit price of $3.90 ended up executing for a market price of $4.53 -- so the problem earned me some money. :)
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Randy,
ReplyDeleteIt's an honor to be the first to comment on your blog.
To reply to your question, I would offer two rule-of-thumbs for your consideration:
1. Analyzed a potential 'Roll-up' only when the equity price has increased by 10% or more above the strike price.
2. Give preference to:
- 'Roll-Up'(same expiration month) if you have 2-weeks or more remaining until expiration.
- 'Roll-Up-and-Out'(to next expiration month) if you have less than 2 weeks remaining until expiration.
Regards,
Jeff