Roll up of covered calls

Posted on July 11, 2011 by admin

I have ITM FFIV calls that are due to expire this week.  This week’s weakness should be a good opportunity to roll up those calls to a later expiration date.  Reason: options with closer expiration dates increase or decrease in price faster than the options with later expiring dates.  Thus, if FFIV price drops, it’s cheaper to buy back those calls to cover, whereas the price of the calls you want to sell changes less: hence more profit.

About admin

Richard Cheng, M.D., Ph.D., is an avid Wall Street investor with 20+ years of investing experience. He is specially adept at observing the world to find the patterns and then design strategies to win his battle. Most, if not all, happenings in the world, follow certain patterns. These patterns may be complex, multi-factorial, not so intuitive at the first glance, or even may appear chaotic. However, even chaos has its own patterns. If you pay attention and be patient, you'll find them and then you will gain an upper hand in your battle. Using this blog space, he documents his trades and his thoughts as they happen. He uses this blog as a a notebook to help him better refine his strategies. Hopefully this will help you as well. Good luck in your trading.
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