I had a stock, POWL, that was down $10K so I sold covered calls and collected just over $5K thinking if it gets called away, no worries. However, over the last two weeks it has gone nuts and is now swung to be up $18K ($28K swing).I will cost me $12K to buy back the calls, which are Oc. 18th $160. Stock closed at $206.
What do I do? What is the strategy here? Keep my basis and the long term cap gains clock moving and buy them back?
Do I buy these back? Advice needed
byu/TheRealJakeMalloy inoptions
Posted by TheRealJakeMalloy
3 Comments
Oct 18th gives you some time. Id watch it and wait…
Based on the YTD chart, it ran from January to march, then pulled back in april, then up again in may and pulled back again in july.
Now it spiked up again and id bet it will come back down in the next 2 weeks, letting you roll it or buy back at a much lower cost. My 2 cents..i know nothing about the company
I haven’t looked at your stock or options pricing but when this happens to me I usually roll the short call up and out. In your case for example maybe buy back the Oct 160 calls and sell Nov or Dec 250 calls. Do it as a spread trade.
That monthly chart looks like a breakout if it closes here/higher. What was the reason for this rip? Change in fundamentals?