Update (IRA): QQQ February 17th 315 Covered Call
Comments: Updating to bring this more to the top of my ideas page ... .
As of the last roll: Cost basis of 301.72 in my stock with 6.31 of extrinsic in the short call. (See Post Below).
Will generally mechanically roll the short call at mopex until my cost basis is below current price, potentially rolling it down further if price pulls too far away from the 315 to pay. Currently, I can roll the short call all the way down to the 302 strike and still make money on the trade, but don't want to short change myself yet.
For example, I could do a "nervous Nelly" roll of the February 315 short call down to the February 300 for a 4.41 credit with a resulting cost basis of 301.72 - 4.41 = 297.31. 300 (the short call strike) - 297.31 = 2.69 ($269) (i.e., I'd still have the opportunity to make money on the trade, assuming a finish above 300).
Alternatively, I could roll from the February 315 to the March 295 for 8.66, resulting in a cost basis of 293.06 with a max profit of the short call strike (295) minus my cost basis of 293.06 or 1.94 ($194).
Point in fact, I could roll it from the February 315 to the June 280 for a 22.59 credit, with a resulting cost basis of 301.72 - 22.59 = 279.13 and still have the opportunity to make money on the trade, although I'd have to wait a very long time for all the extrinsic in the short call to decay out, all for the potential of a 280 (the short call strike) minus my cost basis of 279.13 or .87 ($87).
I'm not going to do any of those things at the moment, but just laying out what I sort of look at when making rolling decisions (i.e., how long of duration, to what strike).
As of the last roll: Cost basis of 301.72 in my stock with 6.31 of extrinsic in the short call. (See Post Below).
Will generally mechanically roll the short call at mopex until my cost basis is below current price, potentially rolling it down further if price pulls too far away from the 315 to pay. Currently, I can roll the short call all the way down to the 302 strike and still make money on the trade, but don't want to short change myself yet.
For example, I could do a "nervous Nelly" roll of the February 315 short call down to the February 300 for a 4.41 credit with a resulting cost basis of 301.72 - 4.41 = 297.31. 300 (the short call strike) - 297.31 = 2.69 ($269) (i.e., I'd still have the opportunity to make money on the trade, assuming a finish above 300).
Alternatively, I could roll from the February 315 to the March 295 for 8.66, resulting in a cost basis of 293.06 with a max profit of the short call strike (295) minus my cost basis of 293.06 or 1.94 ($194).
Point in fact, I could roll it from the February 315 to the June 280 for a 22.59 credit, with a resulting cost basis of 301.72 - 22.59 = 279.13 and still have the opportunity to make money on the trade, although I'd have to wait a very long time for all the extrinsic in the short call to decay out, all for the potential of a 280 (the short call strike) minus my cost basis of 279.13 or .87 ($87).
I'm not going to do any of those things at the moment, but just laying out what I sort of look at when making rolling decisions (i.e., how long of duration, to what strike).
Comment:
Just as a side note, I'm surprised that out of all the QQQ (and other broad market) puts I sold since the beginning of 2022 (and there were a ton of them), I was only unable to do anything meaningful (i.e., strike improvement, duration, rolls) with two short put rungs.
Trade active:
Rolling the February 315 to the March 315 for a 2.10 credit on strength. Cost basis of 299.62.
Trade active:
Rolling the March 315 to the June 315 (there is no April) for a 5.70 credit. Cost basis of 293.92 relative to a current price for the QQQ's of 278 and change. I'll pretty much keep rolling this at intervals so long as cost basis is >current price.
Trade active:
Rolling the short calls down a smidge here ... . Unfortunately, there's only 5 wides to work with, so rolling from the June 315 to the June 310 for a realized gain and an .84 credit. Cost basis of 293.08 with a current value for the 310's of 4.27.
Trade active:
Rolled the June 310 short call down to the June 307 short call for a 1.24 credit. Cost basis of 291.84. The last short put I took assignment on from 2022; my preference is to see the back end of it sooner than later, so trying to keep my cost basis even with current price while still allowing myself some room to make "decent" money on it.
Trade active:
Rolling the June 307 out to July "as is" for a 2.91 credit. Cost basis of 288.93.
Trade closed manually:
Closed here for a 291.90 debit. 2.97 ($297) profit. That gets me out of all of my QQQ positions. I'll look to start re-establishing at intervals in the coming weeks.
