Hello All,
I am new to option trading. A month back, I sold some covered calls of some company at strike price X and premium of 100$ with expiry date of 8/1. Stock went up and trading way over striking price X before expiry date, but option was not assigned. So I rolled over my covered call with same strike price X with new expiry date of 8/8 but earned some more premium. I keep doing this every week because the stock is still over X but not assigned.
I know, I can be assigned option any time and my stocks can be sold at strike price X and I am fine with it, but until that happen, I am planning to keep rolling over every week.
Is this strategy fine or I am missing out some detail?
Validating my rolling strategy
byu/Pretend-Ad-6366 inoptions
Posted by Pretend-Ad-6366
3 Comments
It’s a classic “it works until it doesn’t” thing.
WRT assignment, if the company pays a dividend, keep track of those dates and the dividend amounts. If the time value on the option is less than (or close to) the dividend coming up on the expiration date, your chance of assignment from someone “buying the dividend” goes up substantially.
Are you selling csps or ccs? Your post was kind of confusing
The stock will get called away at expiration unless it gets called early. If you can keep rolling higher for a credit then do it.