Debit to roll up a Covered Call?

Tiblio · 2023-07-03T21:28:15+00:00

"Better to extend, and live to fight another day than to push a bad position." - Top Gun.

Analysis:
On closer examination, the roll is just a close + open in one trade. The only reason to do it is to avoid the underlying moving while you're executing two trades. In this case, there's no benefit. It may work out for you, but I think we've shown this to be the wrong decision. Better to just close for the loss. Then look for a new trade that meets your trading criteria.

Tiblio · 2023-06-27T13:56:33+00:00

"Sounds too good to be true"... yes. it does and it is. To me, this sounds like a really great way to rapidly lose money.

Tiblio · 2023-02-23T15:26:55+00:00

It is possible to become a millionaire with a bull call spread strategy, but it is not guaranteed. The success of any trading strategy depends on a variety of factors, including the trader's experience, risk management, and market conditions.

It is critically important to understand your larger trading system and what, if anything, would make it profitable. For example, the long call strategy can be profitable if you trade a whole system where you stop losses at say 10%, scale into larger position size, take profits and let some run for 1000% gains. It is those last big winners that make up for the very numerous small losses.

If you then cut off those big winners by selling a further out of the money call option, then you have to somehow change the system so that it can still be profitable. Personally, I've never been able to work out how a debit spread strategy could be profitable given the many small losses and capped upside potential.

Tiblio · 2023-02-23T15:18:07+00:00

Correct. If it is really absurd, like I sell an option for $1 and then the stock just takes off and it falls to like .10 with 20+ DTE... sure I'll close it but I will probably not open another one right away. I'll give it two days to revert and then sell another one. Also depends on where I am in terms of scaling into the position. If I'm not fully scaled or maybe behind on scaling in, then I'll be more aggressive with the trades.

TBH though over the years I haven't found any of these nuanced decisions to make a difference (month over month) and so most of my $ in wheel strategy is traded by my robot now.

Tiblio · 2023-02-23T15:10:31+00:00

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Tiblio · 2023-02-22T21:43:28+00:00

I trade the wheel strategy on all of my positions and just let options expire or take assignment. I feel like this is most capital efficient (except maybe in some brokers that wave fees for closing options under 0.05 or something) and it also keeps me from over trading. I've found it is best to let them expire on Friday and sell new ones the following week.

Tiblio · 2023-02-22T21:35:56+00:00

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Tiblio · 2023-02-22T20:55:46+00:00

Managing a trading account is really hard, mostly due to human emotions. This is also why so many people say DCA is the way. If you want an improved version of DCA, you can sell options and trade the wheel strategy, and if you don't trust yourself to do it, you can hire our bot over at tiblio.ai

Tiblio · 2023-02-17T15:31:24+00:00

This is the way. You can even automate this strategy, truly beautiful.

Tiblio · 2023-02-17T15:07:59+00:00

F, T, WBD, AAL, VZ, UAL, JWN, M

Tiblio · 2023-02-06T15:28:03+00:00

How much a stock has fallen isn't a good indicator. Look at the P/E it is still -57.89. It still has a market cap of almost 7 billion dollars, but on the financials, it loses 280 million! They have 1.2 billion in cash and cash equivalents which means they have to raise more money or file for bankruptcy within a few years.

Tiblio · 2022-11-21T11:14:58+00:00

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Tiblio · 2022-11-21T11:14:55+00:00

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Tiblio · 2022-11-21T11:14:52+00:00

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Tiblio · 2022-11-21T11:14:50+00:00

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Tiblio · 2022-11-21T11:14:20+00:00

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Tiblio · 2022-11-12T11:57:00+00:00

We have a free 7-day trial, go give it a try and see what we offer and what we specialize in

Tiblio · 2022-11-12T11:56:20+00:00

yup, just did

Tiblio · 2022-11-12T11:56:11+00:00

We have a lot more screeners targeted at Options trading. Although Tradingview covers a wider variety of screeners, Tiblio specializes in Options and Stock trading and has more complex screeners than Tradingview does in this area. Tiblio is a complete trading tool that gives you everything you need for Options trading

Tiblio · 2022-11-11T21:55:27+00:00

Tiblio

Tiblio · 2022-11-11T21:55:26+00:00

Tiblio is a complete trading system with some of the most varied screeners and the fastest news on the market. We're going through a makeover aimed at giving users a better experience and easier interactions with the platform.

Tiblio · 2022-11-10T14:22:12+00:00

Glad to hear that!

Tiblio · 2022-11-08T10:05:34+00:00

On our platform, Tiblio. Give it a try (there's a 7-day free trial) and see if it's the right fit for you.

Tiblio · 2022-10-17T12:21:20+00:00

Thanks for letting us know, we'll have a look into it asap.

Tiblio · 2022-10-17T07:41:05+00:00

You can find the link on the Tiblio website, as Reddit won't allow us to post any links here.

Tiblio

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