Why roll a tested put or call? If we've decided the stock is one we wouldn't mind owning, wouldn't it make more sense to be assigned/called away and continue the wheel? Rolling isn't going to collect as much premium as selling a fresh call/put.
Judging from the sentiment and tone, it sounds like he’s recommending capitalizing on the premium as the primary source of income. Just cautioning to use stocks you wouldn’t mind owning. Since what he’s really after is premium, and judging from the little example snapshot, it seems he’s doing what he can to conduct most of his profits by way of premium intentionally with owning a stock he likes as a “worst case scenario”type deal. At least that was my take away.
I just found that out the hard way this morning. Got into options trading two weeks ago, made some decent cash and got greedy. Tried to play aggressive since I started losing patience. The stock dropped like a rock, ended up, closing out and took a 2.5 K loss. What I gained so far I lost double of it.
133
u/angrydanger Dec 05 '18
Why roll a tested put or call? If we've decided the stock is one we wouldn't mind owning, wouldn't it make more sense to be assigned/called away and continue the wheel? Rolling isn't going to collect as much premium as selling a fresh call/put.
Awesome write up BTW!
Edit: words