04-05-2020, 11:19 AM
(04-05-2020, 10:26 AM)john Wrote: Thanks Mike and Fenders for advise
No problem and if you want to throw up a few ideas before you trade I'm sure a few of us will give you our two cents. We won't always be right of course, but we can alert you to potential problems. The market is almost sure to be volatile and I would stick with the weeklies for now. It's easier to adjust them out farther if it becomes necessary. If you are buying it might make sense to go farther out. Opinions will vary. In a market like this I don't prefer to lock myself into many options a month or two out. They are tougher to adjust without spending money.
Here's an example of one I called wrong but was able to correct.
I sold a covered weekly MO call on part of my position at strike 35. It became clear it was going to be 36-37 at expiration. I was able to buy back the 35 (at a loss), immediately sell a couple more weeks time and move the strike to 37 selling a new call. I am still slightly ahead on the net call proceeds. Big win? Nope, but I can't get it perfect every time. Now I'll sell the shares for $200 more per lot if I don't roll it forward again. 80% of my calls just expire worthless so I'll make time to deal with a few that don't cooperate initially. Half my mistakes fix themselves with a little patience. And some stocks run to the moon and I have to give up and miss some of the profit. It's just comes with the covered call selling game. I try not to spend much time crying about a smaller profit. That's a waste of time.