Roll Out

I was hedged via a short of the August SPY 108 Call. I rolled the position out to September.

10 comments:

nicasurfer said...

roll out!roll out!

Anonymous said...

What is the advantage of options rollout? Save commission or how it works? please share

Tsachy Mishal said...

I collected another $1.50 in premium. This is the third month in a row I am selling the 108. In all I collected over $4.50 in premium.

I am losing less than $1 on the trade but thats ok because I have made alot more than that on my longs. If the market falls apart that $4.50 will come in handy because I will probably have losses on my longs.

The advantage of rolling out now versus waiting for expiration is that I might not receive as much if we drift away from the strike. On the other side if we end near the 108 strike I will have been able to get more than an additional $1.50. (Please note there will be a dividend before Sept expiration so it is not an apples to apples comparison. The numbers I am using are adjusting for the dividend)

Anonymous said...

Thank you

Anonymous said...

Long DRL @ 1.48

Ol Dawg

Anonymous said...

to continue "The advantage of rolling out now versus waiting for expiration is that I might not receive as much"

What I understood that we collect premium when we write call option. But why we dont get much if we wait until option expiry? please advise

Tsachy Mishal said...

I might get more at expiry if we end closer to the 108 strike. But if we go away from the 108 strike I would end up with less. I was just happy to take the additional $1.50 and didn't want to take a chance.

Anonymous said...

I got it, once again thank you, I usually write at least 17% deep-in-money calls and I dont monitor after that...I expect when option not assigned I get more...otherwise nothing. I always write for same month.

Anonymous said...

does the option lose value when the dividend pays and the stock comes down because of it?

Tsachy Mishal said...

Yes it does lose value when the dividend is paid. But if the option is deep enough in the money they will likely exercise early so they could receive the dividend.