Rolling puts or calls forward is sometimes necessary because I am truly trying to hold these shares, and not get forced to buy overpriced shares, or sell underpriced shares at initial expiration, but squeeze extra monthly income along the way. It works in both ways. In DEC I had two MO puts WAY in the money. Rolled them a few months and they expired worthless. Sold some more time and the market moved my way. Same deal with BAC, HD and AAPL in the opposite direction. I might sell a call for $200, then buy it back for $850 and immediately resell another at a better strike for $830. The tricky part is the x-div date on a high div stock. You are asking to get exercised on a deep in the money put. That's the only time I get exercised early. Rolling forward a few weeks early is often safer. Smart traders try to avoid exercising a option that still had a lot of time value in it. I pay attention to x-div date when I sell an option. Don't sell a put with an expiration a week before x-div as it will cause you grief if the stock moves wrong.
Now stay tuned. This market was crazy and I danced my way around BAC, MET, HD, MO etc with great success. I'm in trouble on AAPL if it doesn't pull back soon. I have an option $1500 in the money and I already rolled it forward once. I'll need a miracle to not sell my shares too cheap. I expect I am going to break even on a position that would have yielded at least $1000 had I not sold a call. In the big picture I almost always make over $2K a month income on option premiums. I may give all my April income back on one just one position. The rubber band snaps in both directions for sure. I just have to stand back and consider how often the market will swing 20% in a few months. Not very often, but I have to manage it when it does. This is about damage control. Like I said, it's a hassle I have to accept. Options are a legal contract, but you can trade it in for a new contract when the story changes. Sometimes for free, sometimes you are slightly upside down to sell some more time. That's the only real point of this ramble. Selling more time cures problems quite often. That is exactly why I roll them when necessary.
Now stay tuned. This market was crazy and I danced my way around BAC, MET, HD, MO etc with great success. I'm in trouble on AAPL if it doesn't pull back soon. I have an option $1500 in the money and I already rolled it forward once. I'll need a miracle to not sell my shares too cheap. I expect I am going to break even on a position that would have yielded at least $1000 had I not sold a call. In the big picture I almost always make over $2K a month income on option premiums. I may give all my April income back on one just one position. The rubber band snaps in both directions for sure. I just have to stand back and consider how often the market will swing 20% in a few months. Not very often, but I have to manage it when it does. This is about damage control. Like I said, it's a hassle I have to accept. Options are a legal contract, but you can trade it in for a new contract when the story changes. Sometimes for free, sometimes you are slightly upside down to sell some more time. That's the only real point of this ramble. Selling more time cures problems quite often. That is exactly why I roll them when necessary.