I have a YELP Naked Call expiring today. This Call has a Strike Price of $26. With the stock well above the Strike Price, at the close I just did a Roll Out. This is the second Roll Out I did in this active position. There are 5 trades involved in this active position so instead of me listing all the trades please go to my “Active Trades/Current Position” and look at the trades involved. When selling Calls, especially Naked Call you must understand Rolling. Sometimes I just do a Roll Out which is changing your Expiration Date. But this time I did a Roll Up & Out. I changed the Expiration Date out 2 weeks and the Strike Price up from $26 to $26.50. I bought back a Call which had an Expiration Date of today and changed it to July 1st. I also changed my Strike Price from $26 to $26.50. Today YELP closed at $26.92. With this new Call I need the stock to go down to below $26.50 and not $26. This gives my new Call a better shot at expiring worthless. If my Call expires worthless I get to keep the entire premium. Here’s the sell order for the Call Option:
Roll Up & Out
Sell to Open – 10 YELP 7/1/16 $26.50 C @ $1.20 (+$1200)
For you beginners please email me if you don’t understand this. This is a MUST understand subject. Don’t get discouraged! Keep reading and keep the emails coming.
Have a nice weekend!
Steve
The Options Coach
going way to fast for me steve rollout thats a new one will keep reading
Don’t give up! Anything with great potential is not easy. “Slow and steady, steady and slow.” The tortoise wins the race!
Yes, Roll Outs are a little advanced but I post everything. Some things are for beginners and some are for traders with more experience. You are a Grasshopper! Start with learning what an option is. Read my section “What is an Option (Call)?”. Then google to get a different perspective, and email me any questions. You can study and make money or you can watch me make money lol.