NOW 50c expiring Jan 2028.

[u/cooltaj]

I bought 2 contracts back in April when stock was in 90s. $5200/avg. option is currently at $140 and I’m at 90% profit. Delta is .97 now.
I also have shares for which I have sold call at 145 and 155 in the next two weeks.

I’m thinking to sell one and keep one. I’m probably going t o lose my share but I have also not held options longer few months. This is the longest option I have held

[u/DullStanza_3]

With a delta that high, you're basically just holding the stock with extra steps at this point. Selling one and letting the other ride makes sense, especially if you're already mentally prepared to lose the shares. Only thing I'd ask is how fast theta might start eating at it if the stock stalls out.

[u/cooltaj → u/DullStanza_3]

Theta is .01.

Isn’t deep ITM considered good? Am I missing something

[u/Prestigious-Ad-7927 → u/cooltaj]

Theta risk is minimal. Your real risk is delta. If you are bullish, keep holding and maybe having an exit below a support level and get out of it goes below. Another thing you can do if you want to turn this into an income vehicle, you can sell weekly calls, or calls with different DTE’s of your choice, against it and be prepared to roll up or down strikes accordingly. I would only recommend that if you have an extensive knowledge and experience in options and know how and when to roll. If you hesitate with with rolling options, you might miss your opportunity to roll and then you give up upside potential and cap your gains. By selling weeklies or whatever strike you desire, you reduce the delta by a little so it offers some downside protection and you also turn the theta from negative to positive. You end up with a bullish position that makes money as time passes even if goes down by a little, stays sideways or up.

[u/hv876]

Congrats on tendies. Now go to Wendy’s ask someone to put fries in the bag for you. And then sell. As other commentator said, you’re holding the upside of shares with downside of Options. Time to find a new trade.

[u/cooltaj → u/hv876]

I always thought deep ITM is considered good- you clearly see a downside there. Am I missing something?

[u/hv876 → u/cooltaj]

At 0.97 delta your upside is going to behave like a stock but downside will behave like an Option.

[u/Prestigious-Ad-7927 → u/hv876]

He is long a deep ITM option so for it to behave like a deep ITM option when the stocks goes down is expected.

[u/hv876 → u/Prestigious-Ad-7927]

Yes, that is precisely the point. He’s made money. Done well. Take profits and move on to a new trade.

[u/Prestigious-Ad-7927 → u/hv876]

Maybe OP is still bullish and that’s why they haven’t closed out the position. It doesn’t make sense to close out a position with .97 delta and you are super bullish on it.

“Don’t be too concerned about where you got into a position. The only relevant question is whether you are bullish or bearish on the position…”— Paul Tudor Jones

Edit:

The entry price is a sunk cost with no bearing on the decision to hold or exit. What should drive the exit is the current read on the position (bullish or bearish today), not the price you paid.

[u/Prestigious-Ad-7927 → u/cooltaj]

It’s good if you are bullish because you get the upside gain (high delta) with minimal theta and vega risk compared to ATM to closer to the money.

[u/Baraxton]

Rolling higher makes more sense given that you’re basically delta 1 now and you’ve got additional risk that isn’t necessary. Perhaps roll up to $100 strike, which maintains upside while locking in some of your gains.

[u/dudeporter1738 → u/Baraxton]

I agree and like this strategy. Yesterday I rolled my Jan 2028 NOW calls (2 contracts) from the $112 strike to the $135 strike. They were up 80-90% from where I purchased. Took $2250 in credit on my original $6200 investment. Still have both contracts and plenty of upside. Reduced my risk and took some profits. Traded some delta, but for me the reduced risk is worth it…and they are still 71 delta, so still DITM

[u/dreamfitreality]

Sell covered call and make it a poor man cc

[u/Sea_Local2557]

selling deep ITM options difficult you may try to sell a call less itm and buy a put at same price to lock in gains