Friday, August 27, 2010

SPY -- Adjustment

The SPY position has been rolled down and out:

Description Date Stock Price OptPrice Quantity aROI
Buy 10 SPY 8/27 2010 $108 Call @ $0.05 2010-08-26 $105.04 $0.05 10 -6.2%
Sell 10 SPY 9/3 2010 $106 Call @ $1.25 2010-08-26 $105.04 $1.25 10 3.0%
 
Posted by at
Labels:

2 comments:

  1. hanksterrSeptember 16, 2010 at 6:06 AM

    Hi Randy,
    I am not sure about a covered call expiring Sept.
    I own SVNT and sold the Sept 15 calls for 2.00.
    SVNT is close to 20.
    Is it better to let it be assigned or roll up and out.
    Thanks.
    Hank

    ReplyDelete
  2. RandySeptember 16, 2010 at 6:37 AM

    It would entirely rest upon whether you want to continue holding the stock.

    Then, it's a matter of deciding whether it's cheaper to roll the option, or to let it be assigned and re-establish the position.

    Typically, I prefer to roll because it is cheaper -- because I get to keep having an option decaying over the weekend. But it will depend on whether that time decay you earn over the weekend is more than the extrinsic value you pay to buy back the ITM call.

    Those decisions can also be affected by whether you are trading in a tax-protected account.

    A better place for the discussion would be:

    http://finance.groups.yahoo.com/group/justcoveredcalls/

    ReplyDelete

Subscribe to: Post Comments (Atom)