I have a sold a leap call 6 months down that is still OTM, but I’m worried that it will get ITM within those 6 months because the entire market is rebounding.
The premiums on closing the call is now higher than I bought it, but I don’t want to do a net debit to close it out.
What’s are some ways I can save my shares from being assigned?
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In 6 months markets would have tanked, you’ll be fine. This mini rally we’ll see will be over in January
You’ve got 4 choices.
Take the L and eat the net debit.
Roll up and out, selling a longer dated option at a higher strike
Increase your upside exposure by buying calls at higher strikes
Hodl and see how it goes
Don’t sell calls at a strike you’re not happy to part with the stock at.
You could buy extra shares at current price.
E.g. you have 100 shares and -1 call, buy 100 shares now and let the original 100 get called away.
Ofc you’re more down if stonk crashes, you could also get less than 100 shares more if it fits better your risk tolerance
>There are a few ways you can save your shares from being assigned:
1. Sell the call before it gets ITM. This will require monitoring the stock price closely, but if you sell the call before it gets in-the-money (ITM), then you won’t have to worry about it getting assigned.
2. Roll the call down and out. This means selling your current call and buying another one with a lower strike price and further out expiration date. This will usually result in a net debit, but it will give you more time for the underlying stock to rebound back above your original strike price so that your new option doesn’t get ITM either. Just be sure not to roll too far out or else you risk losing all of your potential upside entirely!
You can buy to close it then sell another one later if you think the stock is going keep climbing. If it reverses and goes down you can just sell another call and get back the loss you took before. You either make it back by stock appreciation or selling another call later down the road. Just because you take a loss buy to close the call doesn’t mean you can’t sell another one later.
Buy a call on the same expiry and sell a new call at the same expiry to collect the difference in premium
Sell calls at the top.
You shouldn’t be doing pmcc or leaps unless you have a plan for this kind of thing it’s not free money dawg
Can’t he just buy calls further out?
Can’t he just suck it up and take the L?
Sounds like he’s trading emotionally
You could just double Your share size. There is risk ofc
Buying The same strikes for a different date, making it a calender spread, could Also save You a bit
the only way obviously is it closes out of the money or you buy it back before then. given the volatility, chances are you will have an opportunity to buy back cheaper than you sold it for. what’s the position?
Manipulate the market