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Option Traders Unite Forum > ITM Covered Call...what would you do?
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AdGuy

Member since: Jul 07

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Managing Partner, ad agency
Age: 60's
Naperville, IL UNITED STATES
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The run-up in the market has me trying to figure out my best move to capture the most gain on several covered calls that are now fairly deep in the money. One example: COST (Costco). Bought 400 shares at $46.71 in June. Currently trading at $56.75.

I should be delighted, as I wrote 2 July $47.50 calls @ $1.30 which expired. Also wrote 2 Oct. $50 calls at $2.05 then another  2 Oct $52.50 calls at $1.05 after the July calls expired. Since have received an .18 dividend for a total of $933 on the $18,684 initial investment.

Now, at $56.75, I have a couple 'options'...on the assumption that the stock will continue it's bullish trend:
 A.  Let the options be called for nice $660 and $1,158 gains, knowing that I'm leaving about $2,200 of upside on the table.
B. Roll the Oct $50 and $52.50 call options to perhaps April $60 calls at a cost of about $900, protecting the upside potential.
 C. Something else?

What would you do?
thanks.
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OldFart

Member since: Jun 08

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October expiration is still at least a month away, many things can happen. I will just sit on current position until there is some time value in the short calls and then decide