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Started By
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Looking for advice on covered call options.
Posted on 4/23/25 at 7:58 am
Posted on 4/23/25 at 7:58 am
I have a CC option on BITX expiring on 5/2/25 at $45. Looking for advice on my best option since it is getting close to that price. My options are let it be called (cost basis $41, roll it to higher option further out or close it and buy back. What is the board opinion on the best option. I am leaning to letting it be called and if it executes do a cash covered put to buy it back.
5
Posted on 4/23/25 at 8:08 am to jerryc436
A lot can happen in 8 days. I wouldn't touch it this week and likely would let it be called if it closes over $45 on 5/2. That's $400 profit plus the premiums and you can re enter the position when desired or through CSPs.
Posted on 4/23/25 at 8:26 am to jerryc436
Allow the shares to be called away if your gains plus the premium collected exceed your potential gains minus the premium you would pay to close the position.
Mathematically, that would look something like this:
Allow call if : ($45-41) + premium collected > ($current price - $41) - premium paid
Buy back if : ($45-41) + premium collected < ($current price - $41) - premium paid.
Mathematically, that would look something like this:
Allow call if : ($45-41) + premium collected > ($current price - $41) - premium paid
Buy back if : ($45-41) + premium collected < ($current price - $41) - premium paid.
Posted on 4/23/25 at 8:35 am to jerryc436
Experienced options trader here:
It's all based on your sentiment!
BITX just broke out above the 50D MA on the weekly chart. Next target would be to close the Nov 11 gap of $44.43. Then to close the Feb 24th gap of $49.
If you think it continues higher.. Looks likely based on chart, then roll up and out for whatever credit you can.
I'd say buy to close the $45 and roll to 5/30 $50 strike.
fwiw, liquidity looks like shite in these options. The spreads are terrible.
ETA: Because it's a CC, you can wait until the day of EXP to make a move if you'd like.
Also: Look into trading $IBIT instead. Options are more liquid.
It's all based on your sentiment!
BITX just broke out above the 50D MA on the weekly chart. Next target would be to close the Nov 11 gap of $44.43. Then to close the Feb 24th gap of $49.
If you think it continues higher.. Looks likely based on chart, then roll up and out for whatever credit you can.
I'd say buy to close the $45 and roll to 5/30 $50 strike.
fwiw, liquidity looks like shite in these options. The spreads are terrible.
ETA: Because it's a CC, you can wait until the day of EXP to make a move if you'd like.
Also: Look into trading $IBIT instead. Options are more liquid.
This post was edited on 4/23/25 at 8:39 am
Posted on 4/23/25 at 8:56 am to Brobocop
Thanks for th advice. I think I will wait until next week and probably let it be called away. Use that money to buy IBIT maybe.
Posted on 4/23/25 at 9:18 am to jerryc436
Just sell puts and collect the premium. If you love BTC, then sell like the 30 delta for an aggressive premium.
Posted on 4/23/25 at 10:26 am to jerryc436
quote:
I am leaning to letting it be called and if it executes do a cash covered put to buy it back.
This is what I would do.
Posted on 4/24/25 at 11:17 am to jerryc436
90% chance it expires in the money. Let it be called away and sell puts if you want to stay in, or just buy them back.
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