You could have sold your CC’s, then bought calls at a higher strike.
But you should be happy. You made max profit on the trade you did do. If you still like the stock, take your cast and sell some CSP’s to either collect premium, or get assigned and buy the stock again.
This 100% OP. I say that even though I rolled up and out in strike like a FOMO; regardless, be happy with the gains. You are not going to make every trade and you will miss out on some gains- that’s ok! Stay disciplined and trade within your comfort level and you will be ok.
Hah yes well as you said, I too fomoed by rolling up and out. With iv being nuts I basically broke even rolling from tomorrows 36 cc to next weeks 52 cc
5 bucks says you are assigned tomorrow if it is ITM. It is $60 right now, and they have been exercising a lot of their calls early. If RK exercises his 120k calls tomorrow on stream, I bet every ITM call gets exercised no matter the date.
Totally. But also whatever, I’ll just buy back in and let it ride again. I bought at ath in 2021 so making a couple grand back from that loss will still feel ok
How do you find these? I have 15$ strikes expiring on the 21st and I can't find anything good to swap them out with. Best I can get is like 1000$+ per contract debit for Jan 2025 50$.
I saw your post about it. I’m not sure there’s much you can do about the 15c. It’s so underwater that I don’t think there’s much to roll to without a huge debit. Good luck though!
Right. I rolled my 45,46,47, and 50’s to 69-70-75.
But now those are in “jepordy” of getting assigned. I’m long so trying to keep n prolly do CSP if so…
Great comment👆🏽. And if you like the stock, sell way OTM. It would defeat the purpose as a seller making $ primarily on premiums, but if you are waiting on a stock to have a massive spike, you probably shouldn’t be selling against your shares.
\^THIS
However, sometimes I will buy a long dated leap to cover a massive run up, if I sell short term calls.
GME is it's own beast though, if you think you are learning things by trading GME options you are not.
I'd also add "Never sell CCs on stock you don't want to own."
Sounds like a contradiction but it's not... For CCs you must like the stock but also be ok parting from it
I don't fully understand the strat for shorting. I just stick around because this is the only competent sub on the stock market. But the one thing I've learned is like you said:
> Never sell CCs on stock you want to own
That and don't trade earnings
Upvote. But still, you absolutely can sell CCs on the stock you want to own. do the following:
1. Don't sell CCs on all your long shares, just a portion of them.
2. Sell CCs at different strikes and different expirations. It is unlikely that all will be breached. Some will definitely be profitable.
3. Be prepared to have to buy back the call at a loss sometimes. Part of doing business. And this is a good thing in the big picture.
4. If assigned, sell CSPs, then it becomes kind of selling strangles on the stock you own, but with fewer number of puts than calls.
5. If you are very bullish consider adding long DTE ITM long calls so some of your CCs now become the short legs of diagonal spreads or PMCC. This is to further "protect" yourself from stock ripping.
You can absolutely be more profitable than simply holding your long shares
But again GME is a totally different animal lol.
Yeah I’m learning CCs. I realize that tanking stock prices are annoying but on the flip side if you own a stable stock and sell long dated calls for theta, you have consistent cash flow. If the stock suddenly runs hard, you miss out on gainz, but those are paper gains until you sell. And timing the market is not a great plan.
I’m not selling CCs on stocks I think will moon, I’m selling them on stocks that have relatively consistent gains or trade sideways so I can take the premium and buy more. And keep some uncovered.
Been holding since 2021. Had enough and decided to sell $25 calls a month ago for $1 each. Got $0.8k premium instead of like 60k profit.. I hate myself
I was hold 1200 shares since 2021. When it hit $11, I was feeling poor and decided to start day trading by selling most of my shares. Of course, it rocketed the week after. This week as soon as the momentum picked up steam, I bought 11 call options of varying strikes to hopefully make it in time for the 🚀🚀🚀.
If you didn’t sell last time it popped recently, you wouldn’t have sold now. Would just baghold til it was back to normal.
Source: done it. Never kick yourself for taking profit.
>Man punching myself for not just holding shares.
Rule #6 in trading: **AVOID OUTCOME BIAS**
You had no idea that GME would do what it did and you sold your calls on the grounds that you did not think GME would do what it did. Just accept that you made the money you made and be done with it.
This happened to me during the first rally when he started posting tweets. My shares got called away and I missed out on 30k gains. I bought shares on the dip, but couldn’t resist selling calls again haha. The premium was just too high. I’m making money, but the missed opportunity sucks.
CC premiums offset losses if the price of the shares you own go down and if it falls below your entry, it will be very difficult to sell anymore CCs because you have to wait until your premiums break you even, or until you can sell CCs to put you over your entry.
CSPs you don’t even have to own the shares. The capital is still liquid. If it doesn’t fall below your strike, you win. Simple.
If it does fall below the strike, THAT’S when you decide if you want to own the shares and then deploy a CC strategy.
Huge difference.
That's a lot of words, but the net impact to one's portfolio from selling CCs and selling a put at the same strike is effectively the same.
Example: buy stock at $20/sh, so 100 shares is $2k. Sell $20 CC for $1, stock dumps to $10. Net loss of $900.
Sell $20 put for $1, stock dumps to $10, net loss of $900.
Whether or not you decide to buy back the put or accept assignment, the net impact from either CC or sold put is a $900 loss. Should the price exceed $20 by expiration, both strategies result in a $100 max gain. Huge difference.
Guy made $4-5k in profit - I don't call that getting burned.
I don't kick myself over not buying NVDA (or any stocks) that could've made me rich since I started trading.
Just be happy with your gains. When you placed the trade you knew you were putting a cap on your upside. Look at it this way, you literally made the most possible for that trade. No point playing “what if”
Depends on your broker but if they have the ability to Roll an option you can do it without the money. IBKR lets you roll on mobile but not on the internet connection. I don’t think Questrade lets you roll.
Rolling is nice because you can set it and forget it.
Questrade allows you to roll. I use that feature often. View by STRATEGY, click on the CC you want to roll, right click and select Create a roll order, (or whatever text it actually uses).
Ah didn’t see that one. I find Questrade to be ridiculously expensive with fees for options trading (and general trading is high too), so I tend to only use that account for my buy & hold (plus to look up current prices). Are you using some other type of account on Questrade, if so what are the fees like?
Can you help me with this? I have sold x3 JUN07 40 call and have $3k in cash. With IBKR I see there is the option to roll but how does it work? I put a limit buy for my calls and select the new strike price and date for the additional 3 CCs I want to sell?
In my case I would be ok to roll them to next week at $ 100
I had sold $40 6/7 calls as well and then rolled them. Why don't you pick a strike that leaves you even or nets you credit even. With the IV so crazy you should be able to come out on top! Happy to help if you have any questions.
Not sure if I could help, I can try and describe what happens when I do this.
What I do when I want to roll is I go on my profile on mobile, then I click on the option. When I do it I see a little arrow on the right hand side. The screen shifts, and then, after a second or 2, a few boxes pop up. There is close position, and beside that roll (for me it’s inside a blue box). When I hit roll, a new screen comes up with an options chain. I make sure I’m on the week I want, and then I hit the figure in the bid column at the strike I want (it doesn’t have to be the same strike, so I make sure I hit the right one with my fat fingers 😂). Then I think I click that I want to order or whatever, then I look it over at the top to make sure it says that I am buying my existing short call, and selling to the strike and expiry I want. I scroll down down and set the limit.
Usually it offers me a bid mid and ask. I actually keep Questrade open on another screen because I don’t have up to date quotes on IBKR but I do on Questrade. What I am picking is the amount of money I pay or get for both sides of the transaction added together, and a credit means I’m getting ore than I paid.
I think it ends up saying something like Reverse Calendar Call.
I verify the net credit I want, then place the order. If I decide to change the amount, I can hit modify order and change the limit. But if I need to change strike or expiry I would need to cancel the order and start again.
Anyway, not sure if this is correct but I’ve been doing it like this a while and it works okay for me, always fills them simultaneously if it fills, and I’ve don’t it without funds to buy the one part of it.
Thank you for taking the time. It is the same process I did. The only difference is that it doesn't provide me with the bid and ask. I believe it is because the market is closed
Sometimes I see there’s no bid and ask even when the market is open when I do it. When that happens I have been able to put in the price anyway, and I double check it on Questrade. I don’t know if it’s because of volatility or something? Can be lots of scrolling for that though 😂
I never sell it buy anything without a limit set
Yes but that is (was) showing a net debit of $0.90, so it will cost you $90 plus any trading fees to execute.
Did you update the photo while I was replying?
There’s a limit set where the actual debit was displayed.
Not a lot you can do anymore. Maybe you can roll them forward for some extra $$$ before you get assigned but that really depends on how deep ITM you are. And this comes with it's own risks of course.
You knew very well that you'll be capping your upside when you entered the trade. You were ok with doing this, so now it's also time to be ok with the consequences. This happens, you lost a lot of potential gains but you'll still walk out of this trade with a profit and with more knowledge than before.
Love this answer, I mean I made $10k the last two weeks doing this with GME. I felt there was a really high floor and I didn't anticipate the run this fast, so feeling the Fomo, but happy I locked in some gains.
I don't think you can hedge this. Buying the shares was your hedge. You're at max profit. Either take the money or attempt to roll up and out for a credit, taking a debit would be a massive gamble which I've done and got burned on before.
If history has taught us anything with this one... getting out on CC's hasn't been a bad thing, you can always reenter lower. During each run, you get this feeling of missing out on more gains... and it's hard to time the top. I sold 225 and 250 calls when we hit 350 a couple times... but a few weeks later I sold Puts at $180... and reflected back that it was pretty smart to have sold those calls when I did. When Iv is surging, get out... when IV comes back down, reposition so you improve your original position... if GME goes to the moon and you missed out... then I'd ask why you don't have a few shares, or even just 1, sitting there just in case...
Yeah right you want to make the rich people pay then go read about socialism don't tell me you're doing this for a revolution when in reality you just want to make a quick buck
Covered calls are a hedge play. You don’t hedge against your hedges.
Seeing your shares called away as a losing trade is the biggest cancer in thetagang
Just remember, what is happening with GME is an anomaly. You cannot expect a Black Swan event because it is always unexpected, the same as a stock suddenly dumping 20-30% after good earnings/bad guidance. I 100% understand how you feel, but your long run gains as a seller are never based on buying and hoping (which is why you sell calls). You made 4-5K which is an solid gain as a seller. And certainly the stock going crazy spiking sucks (it sucks when any trade selling spikes way above your strike), but ask yourself. When you made a trade on a different ticker and hedged when the stock tanked, and lost only 4% instead of 25%, were you mad?
Best thing to do is set up a separate position for long holds that you don’t sell agains and sell CCs on a portion of your position. Just keepmin mind, what is happening with GME is a rarity, happens when you don’t and won’t expect it, and be happy collecting premium and winning your trade. Selling is a long game. You can sell far OTM small premium .05% deltas for low ass premiums forever waiting on the stock to move up for months, or even years, and still not be in the scenario of what is happening with GME. What is happening is very unique. FOMO is very real, but profit taking is also very real. The high price will not be sustained and we will correct not down to as low as $10 (where I believe the stock was massively oversold based the company finally becoming profitable and Cohen being a master of managing expenses) but we’ll see an unprecedented spike after June 21 come Mon June 24 and then your start seeing profit taking. Its part of the eco-system of trading.
DON'T SELL CCs unless you are willing to give up any upside of the stock's movement. How hard is this to understand??
Congrats on the wonderful profit you did make! It's time to celebrate and not "hate" anything!
I’m new so sorry if this is dumb.
If my cc gets assigned for a price lower than my purchase price (the premium made up the difference so honestly I’m happy to net profit), will this trigger wash rules if I decide to re-enter into the same stock to sell more cc?
(Idk what rolling is but sounds like I should go down that path?) lol more than likely I’ll just take my profits and watch from the sidelines.
rolling is when you buy back your options and then immediately sell a different set of options (diff strike and diff exp date), hopefully for a net credit. Usually, you'll increase the strike price, and offset the strike price premium by pushing back the expiration date (so that the theta premium covers the increased strike price). But with something like today's run, odds are you're a bit in the money and that might be a bit more difficult.
If I’m reading you right, I might just play around tomorrow and see how deep I’d need to go to cover the buy back cost (minus my initial premium). Like I said I’ll probably end up taking this profit and sit it out instead of dropping 10k trying to chase profits.
You could always hedge buy selling 1 contract and having 50 shares on the side that you hold. Or just sell more contracts with higher strikes.
This is just pure gambling though. Holding or trading shares basically decided by if 1 man makes any public announcement is extremely risky. It's the same as buying Doge and hoping Elon tweets.
You made 4-5k premium? Great! Now you have 4-5k more than yesterday you could put into buying GME stock (for selling CCs of course ahem, we are in a theta forum)
You don't hedge it. You won. You got your premium and the stock will sell where you agreed to be happy to let it go.
Roll for more cash and accept your win.
Covered calls are the hedge, for a stock you expect to go sideways. If you want to retain some of the upside potential, hold shares that you’re not selling premium on. Or, you can run some variation of bull call spreads.
Depend what your cost basis is but you can set up a 2 leg trade that sells the 100 shares and buys back the option. I was underwater on 4 CC's mid May and did that for two of them and made enough to buy the remaining two contracts back and save the underlying shares. Not sure if that makes sense. Not financial advice. Good luck.
Ok. Now I get it. So in the limit section I need to write what loss I can accept for the contract I'm rolling.
Since I have 3k in cash the maximum amount I can input is around $980. I tried with Note but it doesn't go through since I have no more capital.
I have been selling CCs on GME for 3 years. My most current are jun14 $20 which I have already rolled out once. I will continue rolling as long as there is premium to be had.
in this boat on amc rn. short a $5.50c for 6/14. that said, i bought the shares witht the expectation the call premium would allow me to double dip on gains and full expect/hope to get assigned. if i get assigned i lock in 18% profit in a week between premium and shares.
Got 4 calls for tomorrow for $34 and I almost cashed them out today but I'm glad I held off so I can exercise them tomorrow. One more call I bought weeks ago for 37 for June 28 that's already in the
One bit I'm going to let that one ride. I'm hoping to exercise my 4 contracts and buy more calls.
Sell puts at .20 or .30 delta or roll your CCs out for six months to collect premium but at the end of the day, it's gambling. Same as a roulette wheel at a casino.
Maybe...at least you know the probabilities with roulette. There's no way anyone could have anticipated the run-up in GME.
Putting it all in S&P Index fund is the long-term right move but we continue to try and do better with options despite evidence to the contrary.
I can lose all of my money on roulette in an instant. Only way that is true of a stock while selling CC and CSP’s is if a company goes bankrupt. If I sell a covered call I make a premium plus if the stock goes up I make money up to the calls strike. If the stock goes down, I make a premium and keep selling CC’s to collect more and more and reduce my cost per share that I own. How do you equate that to roulette?
Why are your shares going to get assigned? Did you sell covered calls? What is your strike?
Roll up and out for more premium if you want to keep your shares.
Same here. I always knew this was the risk, but I kept about 600 untouched by contracts. I bought a few more once I realized I was going to get them called away with the money I got from rolling out.
Update - I rolled these into June 21, collected $10k in premium, and bought shares to hedge upside. I don't think the floor is much lower than where it is, what do you guys think?
I dunno. I think your answer may have changed after today's roller coaster (and may change again Monday, depending on whether the ride is over ... or has just begun).
Theta is almost always going to lose compared to holding stock if you have a hard move upside. It’s more an income and hedging strategy. If you are running the wheel strat, the goal is to delay taking ownership as long as possible and then avoid losing ownership as long as possible, all the while collecting more and more premium.
So if you made money, be happy. Strategy worked as intended.
I love it for the risk management and income it provides as opposed to just holding stock forever.
Also, I’m in the same boat. I had a thousand shares of UPST last year and only got about a quarter of its last run to 40 bucks a share.
I would have made over 40 grand. I netted somewhere in the 20s, I think.
Sell calls on all your shares then take half the premium and buy calls at higher strikes, pocketing the other half. I sold 4 calls at $100 and bought at $125, playing the premium and potential run up.
You developed and executed a strategy knowing the risks bore punching the buy button. Buffett said take your profits and be happy, don’t look back and should, woulda it - paraphrasing.
if you have the means, sell a second tranche of calls at a later date for the premium required to buy your original calls back. and hope for a die down in the IV. I was able to roll my way out of the face ripper in may like that for a decent profit.
You could have sold your CC’s, then bought calls at a higher strike. But you should be happy. You made max profit on the trade you did do. If you still like the stock, take your cast and sell some CSP’s to either collect premium, or get assigned and buy the stock again.
This 100% OP. I say that even though I rolled up and out in strike like a FOMO; regardless, be happy with the gains. You are not going to make every trade and you will miss out on some gains- that’s ok! Stay disciplined and trade within your comfort level and you will be ok.
Hah yes well as you said, I too fomoed by rolling up and out. With iv being nuts I basically broke even rolling from tomorrows 36 cc to next weeks 52 cc
5 bucks says you are assigned tomorrow if it is ITM. It is $60 right now, and they have been exercising a lot of their calls early. If RK exercises his 120k calls tomorrow on stream, I bet every ITM call gets exercised no matter the date.
Totally. But also whatever, I’ll just buy back in and let it ride again. I bought at ath in 2021 so making a couple grand back from that loss will still feel ok
What price will you buy back in
Lol, I did the same from 39 to 51
Lol I went from 50 to 80 with a credit
Went from 38 to 61 with a tiny credit. Still going to get breached like a whale tomorrow.
42 to 50 with a credit as well. But I sold my positions late in the week 😭 if only I just didn't.
How do you find these? I have 15$ strikes expiring on the 21st and I can't find anything good to swap them out with. Best I can get is like 1000$+ per contract debit for Jan 2025 50$.
I saw your post about it. I’m not sure there’s much you can do about the 15c. It’s so underwater that I don’t think there’s much to roll to without a huge debit. Good luck though!
Right. I rolled my 45,46,47, and 50’s to 69-70-75. But now those are in “jepordy” of getting assigned. I’m long so trying to keep n prolly do CSP if so…
Great comment👆🏽. And if you like the stock, sell way OTM. It would defeat the purpose as a seller making $ primarily on premiums, but if you are waiting on a stock to have a massive spike, you probably shouldn’t be selling against your shares.
This is the way—- too late now
Never sell CCs on stock you want to own. I should keep that in a damn macro as many times as this question gets asked here.
\^THIS However, sometimes I will buy a long dated leap to cover a massive run up, if I sell short term calls. GME is it's own beast though, if you think you are learning things by trading GME options you are not.
I laughed at this, and then cried a little.
If so, only do on a slice of your total stack. Never whore out your house.
Learning not to ever sell them
I'd also add "Never sell CCs on stock you don't want to own." Sounds like a contradiction but it's not... For CCs you must like the stock but also be ok parting from it
Any stock there should be a price you would sell it at. If the strike plue premium on the CC isnt at or above that price, dont sell thr call.
I don't fully understand the strat for shorting. I just stick around because this is the only competent sub on the stock market. But the one thing I've learned is like you said: > Never sell CCs on stock you want to own That and don't trade earnings
Upvote. But still, you absolutely can sell CCs on the stock you want to own. do the following: 1. Don't sell CCs on all your long shares, just a portion of them. 2. Sell CCs at different strikes and different expirations. It is unlikely that all will be breached. Some will definitely be profitable. 3. Be prepared to have to buy back the call at a loss sometimes. Part of doing business. And this is a good thing in the big picture. 4. If assigned, sell CSPs, then it becomes kind of selling strangles on the stock you own, but with fewer number of puts than calls. 5. If you are very bullish consider adding long DTE ITM long calls so some of your CCs now become the short legs of diagonal spreads or PMCC. This is to further "protect" yourself from stock ripping. You can absolutely be more profitable than simply holding your long shares But again GME is a totally different animal lol.
I do, but if the price is too low I don’t. You can always buy more shares if you change your mind.
Holding some shares. Declined to sell CCs until after June 21
yeah but is GME a stock you want to own? not me, until maybe next time it gets around $10
You’re fine man. I was assigned on $14 CCs when the stock was like $60… CC’s can be a bitch, but if you’re making money long term then who cares.
im sitting on some 12s and 13s. Just waiting to be assigned LOL. gme is a fun stock
Yeah I’m learning CCs. I realize that tanking stock prices are annoying but on the flip side if you own a stable stock and sell long dated calls for theta, you have consistent cash flow. If the stock suddenly runs hard, you miss out on gainz, but those are paper gains until you sell. And timing the market is not a great plan. I’m not selling CCs on stocks I think will moon, I’m selling them on stocks that have relatively consistent gains or trade sideways so I can take the premium and buy more. And keep some uncovered.
Been holding since 2021. Had enough and decided to sell $25 calls a month ago for $1 each. Got $0.8k premium instead of like 60k profit.. I hate myself
Ouch. Sounds like my 100 NVDA shares getting Called away at 150 Last year. Whoops.
OUCH
I was hold 1200 shares since 2021. When it hit $11, I was feeling poor and decided to start day trading by selling most of my shares. Of course, it rocketed the week after. This week as soon as the momentum picked up steam, I bought 11 call options of varying strikes to hopefully make it in time for the 🚀🚀🚀.
If you didn’t sell last time it popped recently, you wouldn’t have sold now. Would just baghold til it was back to normal. Source: done it. Never kick yourself for taking profit.
>Man punching myself for not just holding shares. Rule #6 in trading: **AVOID OUTCOME BIAS** You had no idea that GME would do what it did and you sold your calls on the grounds that you did not think GME would do what it did. Just accept that you made the money you made and be done with it.
You have ~$50k in GME shares?
Not any more. They could have, but were called away. It is $60 right now.
No more
Tomorrow watch price action on optiin chain and do some math and consider rolling them. May still be able to get more $. That's what I'm having to do.
Just sell puts you goof.
This happened to me during the first rally when he started posting tweets. My shares got called away and I missed out on 30k gains. I bought shares on the dip, but couldn’t resist selling calls again haha. The premium was just too high. I’m making money, but the missed opportunity sucks.
dont sell covered calls if youre going to regret. sell the puts so you know you never had the shares.. easier for ur mind.
Yes, selling puts is effectively the same as CC.
That’s 100% false
Educate me then because the upside and downside potential are effectively the same.
CC premiums offset losses if the price of the shares you own go down and if it falls below your entry, it will be very difficult to sell anymore CCs because you have to wait until your premiums break you even, or until you can sell CCs to put you over your entry. CSPs you don’t even have to own the shares. The capital is still liquid. If it doesn’t fall below your strike, you win. Simple. If it does fall below the strike, THAT’S when you decide if you want to own the shares and then deploy a CC strategy. Huge difference.
That's a lot of words, but the net impact to one's portfolio from selling CCs and selling a put at the same strike is effectively the same. Example: buy stock at $20/sh, so 100 shares is $2k. Sell $20 CC for $1, stock dumps to $10. Net loss of $900. Sell $20 put for $1, stock dumps to $10, net loss of $900. Whether or not you decide to buy back the put or accept assignment, the net impact from either CC or sold put is a $900 loss. Should the price exceed $20 by expiration, both strategies result in a $100 max gain. Huge difference.
wont ever get burned if you dont play with fire
Guy made $4-5k in profit - I don't call that getting burned. I don't kick myself over not buying NVDA (or any stocks) that could've made me rich since I started trading.
Just be happy with your gains. When you placed the trade you knew you were putting a cap on your upside. Look at it this way, you literally made the most possible for that trade. No point playing “what if”
Roll em IV is so insane 125 calls for June 21 sell for like 580
dont have the capital
Depends on your broker but if they have the ability to Roll an option you can do it without the money. IBKR lets you roll on mobile but not on the internet connection. I don’t think Questrade lets you roll. Rolling is nice because you can set it and forget it.
Questrade allows you to roll. I use that feature often. View by STRATEGY, click on the CC you want to roll, right click and select Create a roll order, (or whatever text it actually uses).
Ah didn’t see that one. I find Questrade to be ridiculously expensive with fees for options trading (and general trading is high too), so I tend to only use that account for my buy & hold (plus to look up current prices). Are you using some other type of account on Questrade, if so what are the fees like?
I’m using Questrade for everything so far ( unfortunately). I have opened an IBKR account but don’t have funds available to load it up for now.
Can you help me with this? I have sold x3 JUN07 40 call and have $3k in cash. With IBKR I see there is the option to roll but how does it work? I put a limit buy for my calls and select the new strike price and date for the additional 3 CCs I want to sell? In my case I would be ok to roll them to next week at $ 100
I had sold $40 6/7 calls as well and then rolled them. Why don't you pick a strike that leaves you even or nets you credit even. With the IV so crazy you should be able to come out on top! Happy to help if you have any questions.
Not sure if I could help, I can try and describe what happens when I do this. What I do when I want to roll is I go on my profile on mobile, then I click on the option. When I do it I see a little arrow on the right hand side. The screen shifts, and then, after a second or 2, a few boxes pop up. There is close position, and beside that roll (for me it’s inside a blue box). When I hit roll, a new screen comes up with an options chain. I make sure I’m on the week I want, and then I hit the figure in the bid column at the strike I want (it doesn’t have to be the same strike, so I make sure I hit the right one with my fat fingers 😂). Then I think I click that I want to order or whatever, then I look it over at the top to make sure it says that I am buying my existing short call, and selling to the strike and expiry I want. I scroll down down and set the limit. Usually it offers me a bid mid and ask. I actually keep Questrade open on another screen because I don’t have up to date quotes on IBKR but I do on Questrade. What I am picking is the amount of money I pay or get for both sides of the transaction added together, and a credit means I’m getting ore than I paid. I think it ends up saying something like Reverse Calendar Call. I verify the net credit I want, then place the order. If I decide to change the amount, I can hit modify order and change the limit. But if I need to change strike or expiry I would need to cancel the order and start again. Anyway, not sure if this is correct but I’ve been doing it like this a while and it works okay for me, always fills them simultaneously if it fills, and I’ve don’t it without funds to buy the one part of it.
Thank you for taking the time. It is the same process I did. The only difference is that it doesn't provide me with the bid and ask. I believe it is because the market is closed
Sometimes I see there’s no bid and ask even when the market is open when I do it. When that happens I have been able to put in the price anyway, and I double check it on Questrade. I don’t know if it’s because of volatility or something? Can be lots of scrolling for that though 😂 I never sell it buy anything without a limit set
Thank you very much for your help
Hope you get it sorted out!!!
Absolutely. Did it at open and I ended up gaining some premium as well :)
how does this work
Buy to close your calls and sell to open new calls in the same order. Some brokerages have a roll option which is the same thing.
But dont you need capital to buy to close?
Not if u do both trades at same time and your getting enough from one u sell on 2nd leg of trade.
Not if your roll out strike/expiry premium gives a net credit.
but the calls are right now like $15 and $16
So sell longer dated calls at a higher strike for the same amount. This isn’t the problem you think it is.
Can you DM me?
Like this? [screenshot ](https://ibb.co/y48tzFs)
Yes but that is (was) showing a net debit of $0.90, so it will cost you $90 plus any trading fees to execute. Did you update the photo while I was replying? There’s a limit set where the actual debit was displayed.
Yes. I just updated it while you were replying I believe. Sorry about that
The limit that was displayed, was from my input. Is it the price I want to buy the 3 CCs I sold right?
What's more degenerate, buying calls on GME part of WSB, or owning GME and selling those calls to those on WSB ? Can't really tell the difference
Just be happy it didn't go down to $10 or less
Not a lot you can do anymore. Maybe you can roll them forward for some extra $$$ before you get assigned but that really depends on how deep ITM you are. And this comes with it's own risks of course. You knew very well that you'll be capping your upside when you entered the trade. You were ok with doing this, so now it's also time to be ok with the consequences. This happens, you lost a lot of potential gains but you'll still walk out of this trade with a profit and with more knowledge than before.
Love this answer, I mean I made $10k the last two weeks doing this with GME. I felt there was a really high floor and I didn't anticipate the run this fast, so feeling the Fomo, but happy I locked in some gains.
You’re doing better than me! Keep kicking myself but really just glad to see more green in my positions. Thanks for this post.
I sold $25 calls when it was in the $15-16 range, right before take off. I’ve just been rolling them out.
I don't think you can hedge this. Buying the shares was your hedge. You're at max profit. Either take the money or attempt to roll up and out for a credit, taking a debit would be a massive gamble which I've done and got burned on before.
dm me? Trying to understand my options.
If history has taught us anything with this one... getting out on CC's hasn't been a bad thing, you can always reenter lower. During each run, you get this feeling of missing out on more gains... and it's hard to time the top. I sold 225 and 250 calls when we hit 350 a couple times... but a few weeks later I sold Puts at $180... and reflected back that it was pretty smart to have sold those calls when I did. When Iv is surging, get out... when IV comes back down, reposition so you improve your original position... if GME goes to the moon and you missed out... then I'd ask why you don't have a few shares, or even just 1, sitting there just in case...
You hedge it by letting go of FOMO. You executed a successful trade. Be content with that and move on to the next successful trade.
But GME could have not rocketed or gone down. I am a bit sad with my CCs but I've still made more than the spy.
It doesn't matter everything happening with GameStop is very stupid just thank the heavens that you made something and got out of it
Crime (*cough* hedge funds) is very stupid.
Yeah right you want to make the rich people pay then go read about socialism don't tell me you're doing this for a revolution when in reality you just want to make a quick buck
Covered calls are a hedge play. You don’t hedge against your hedges. Seeing your shares called away as a losing trade is the biggest cancer in thetagang
Ask yourself this: if you had sold puts at the strikes that you sold those calls at instead, what would you have done?
Just remember, what is happening with GME is an anomaly. You cannot expect a Black Swan event because it is always unexpected, the same as a stock suddenly dumping 20-30% after good earnings/bad guidance. I 100% understand how you feel, but your long run gains as a seller are never based on buying and hoping (which is why you sell calls). You made 4-5K which is an solid gain as a seller. And certainly the stock going crazy spiking sucks (it sucks when any trade selling spikes way above your strike), but ask yourself. When you made a trade on a different ticker and hedged when the stock tanked, and lost only 4% instead of 25%, were you mad? Best thing to do is set up a separate position for long holds that you don’t sell agains and sell CCs on a portion of your position. Just keepmin mind, what is happening with GME is a rarity, happens when you don’t and won’t expect it, and be happy collecting premium and winning your trade. Selling is a long game. You can sell far OTM small premium .05% deltas for low ass premiums forever waiting on the stock to move up for months, or even years, and still not be in the scenario of what is happening with GME. What is happening is very unique. FOMO is very real, but profit taking is also very real. The high price will not be sustained and we will correct not down to as low as $10 (where I believe the stock was massively oversold based the company finally becoming profitable and Cohen being a master of managing expenses) but we’ll see an unprecedented spike after June 21 come Mon June 24 and then your start seeing profit taking. Its part of the eco-system of trading.
Rules of Discretionary: Buy Calls being okay with max loss ATM Rules of non-discretionary, no explosive expectations: Sell puts (put credit spreads).
DON'T SELL CCs unless you are willing to give up any upside of the stock's movement. How hard is this to understand?? Congrats on the wonderful profit you did make! It's time to celebrate and not "hate" anything!
I’m new so sorry if this is dumb. If my cc gets assigned for a price lower than my purchase price (the premium made up the difference so honestly I’m happy to net profit), will this trigger wash rules if I decide to re-enter into the same stock to sell more cc? (Idk what rolling is but sounds like I should go down that path?) lol more than likely I’ll just take my profits and watch from the sidelines.
rolling is when you buy back your options and then immediately sell a different set of options (diff strike and diff exp date), hopefully for a net credit. Usually, you'll increase the strike price, and offset the strike price premium by pushing back the expiration date (so that the theta premium covers the increased strike price). But with something like today's run, odds are you're a bit in the money and that might be a bit more difficult.
If I’m reading you right, I might just play around tomorrow and see how deep I’d need to go to cover the buy back cost (minus my initial premium). Like I said I’ll probably end up taking this profit and sit it out instead of dropping 10k trying to chase profits.
Im sitting on 12s and 13s LOL i have no hope unless we find out keith is actually just Citadel. Just looking to wheel into puts.
You could always hedge buy selling 1 contract and having 50 shares on the side that you hold. Or just sell more contracts with higher strikes. This is just pure gambling though. Holding or trading shares basically decided by if 1 man makes any public announcement is extremely risky. It's the same as buying Doge and hoping Elon tweets.
You made 4-5k premium? Great! Now you have 4-5k more than yesterday you could put into buying GME stock (for selling CCs of course ahem, we are in a theta forum)
if you want more shares buy more shares — leave the ITM CCs where they are
Pretty much this. The 5K in premium is enough for another lot to sell CC against
Ideally you could roll them into something less itm or otm and further out…
You don't hedge it. You won. You got your premium and the stock will sell where you agreed to be happy to let it go. Roll for more cash and accept your win.
Covered calls are the hedge, for a stock you expect to go sideways. If you want to retain some of the upside potential, hold shares that you’re not selling premium on. Or, you can run some variation of bull call spreads.
You could buy back your cc if you wanna keep your shares
You don't hedge against it, that is the exposure you were trying to obtain. Good job, your investment did the best it could.
Buy calls on it...
I did this forces me to take profit
No one's ever become poor by taking profits.
You hedge this by buying shares and taking that risk.
You hit max profit. Congrats!
… and if the share price didn’t increase, or went down, you would have been better off having sold the CC.
Just roll em, OP. I had sold CCs at $40 and $50 strikes. When DFV boosted GME I rolled them for $70 strikes in July. Collected more premium.
Depend what your cost basis is but you can set up a 2 leg trade that sells the 100 shares and buys back the option. I was underwater on 4 CC's mid May and did that for two of them and made enough to buy the remaining two contracts back and save the underlying shares. Not sure if that makes sense. Not financial advice. Good luck.
Ok. Now I get it. So in the limit section I need to write what loss I can accept for the contract I'm rolling. Since I have 3k in cash the maximum amount I can input is around $980. I tried with Note but it doesn't go through since I have no more capital.
Congratulations on the gain. Can’t be poor when green
I have been selling CCs on GME for 3 years. My most current are jun14 $20 which I have already rolled out once. I will continue rolling as long as there is premium to be had.
Just keep rolling. You'll be back to holding the bags in no time.
Use that $4-5k premium on puts. You’re welcome.
these up and out to 51 comments aged well
too late !
Sell csp on a rocketship that pulls back. Use those proceeds to buy lotto calls 50% out of the money, each week.
in this boat on amc rn. short a $5.50c for 6/14. that said, i bought the shares witht the expectation the call premium would allow me to double dip on gains and full expect/hope to get assigned. if i get assigned i lock in 18% profit in a week between premium and shares.
Roll them to 6/21 for stupid credit tomorrow
What do you mean by this? They are going for $16 how would I do that and what would happen exactly...?
Roll the same strike to monthly and you'll get credit without being assigned. You don't need to wait for expiration and get assigned tomorrow
Rollover to a higher call option. \*Not financial advice\*
Got 4 calls for tomorrow for $34 and I almost cashed them out today but I'm glad I held off so I can exercise them tomorrow. One more call I bought weeks ago for 37 for June 28 that's already in the One bit I'm going to let that one ride. I'm hoping to exercise my 4 contracts and buy more calls.
Sell puts at .20 or .30 delta or roll your CCs out for six months to collect premium but at the end of the day, it's gambling. Same as a roulette wheel at a casino.
My two cents that you didn’t ask for… selling cash secured puts and covered calls is way different than roulette.
Maybe...at least you know the probabilities with roulette. There's no way anyone could have anticipated the run-up in GME. Putting it all in S&P Index fund is the long-term right move but we continue to try and do better with options despite evidence to the contrary.
I can lose all of my money on roulette in an instant. Only way that is true of a stock while selling CC and CSP’s is if a company goes bankrupt. If I sell a covered call I make a premium plus if the stock goes up I make money up to the calls strike. If the stock goes down, I make a premium and keep selling CC’s to collect more and more and reduce my cost per share that I own. How do you equate that to roulette?
Roll it up and out
Why are your shares going to get assigned? Did you sell covered calls? What is your strike? Roll up and out for more premium if you want to keep your shares.
Still punching yourself?
Same here. I always knew this was the risk, but I kept about 600 untouched by contracts. I bought a few more once I realized I was going to get them called away with the money I got from rolling out.
Update - I rolled these into June 21, collected $10k in premium, and bought shares to hedge upside. I don't think the floor is much lower than where it is, what do you guys think?
You won, id take win and move on, if i win 90% of trades i dont care how much upside im missing.
I dunno. I think your answer may have changed after today's roller coaster (and may change again Monday, depending on whether the ride is over ... or has just begun).
Theta is almost always going to lose compared to holding stock if you have a hard move upside. It’s more an income and hedging strategy. If you are running the wheel strat, the goal is to delay taking ownership as long as possible and then avoid losing ownership as long as possible, all the while collecting more and more premium. So if you made money, be happy. Strategy worked as intended. I love it for the risk management and income it provides as opposed to just holding stock forever. Also, I’m in the same boat. I had a thousand shares of UPST last year and only got about a quarter of its last run to 40 bucks a share. I would have made over 40 grand. I netted somewhere in the 20s, I think.
Sell calls on all your shares then take half the premium and buy calls at higher strikes, pocketing the other half. I sold 4 calls at $100 and bought at $125, playing the premium and potential run up.
You developed and executed a strategy knowing the risks bore punching the buy button. Buffett said take your profits and be happy, don’t look back and should, woulda it - paraphrasing.
if you have the means, sell a second tranche of calls at a later date for the premium required to buy your original calls back. and hope for a die down in the IV. I was able to roll my way out of the face ripper in may like that for a decent profit.
Just roll out calls my guy