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A good covered call calculator will help you answer the question "should I roll my position? When rolling you will want to consider important variables like: Your covered call calculator should include all of these.

Covered call calculator (buy-write): Purchase stocks, write calls against them

Rolling a covered call position means you buy back the option portion of the position and then sell a different option either a different strike, or expiration month, or both. And let's imagine you sold a January call option for 23 that same day. This is your situation today Dec It has been a month since you made that investment. During that time AAPL has gone up now at If you were to close today, this is your situation:. So you would make money if you closed it out today.

Covered Call Calculator

However, there is a way to increase the profit on this trade even more Because AAPL has an earnings release during the Feb option cycle you may not want to roll out to Feb. But you could roll up to the strike from the strike you have today since your option is now deep in the money. You would do this by buying back the Jan option and then selling the Jan option.

Your covered call calculator should show you the difference like this:. Ideally, your covered call calculator will let you compare many different options at the same time, and also warn you about earnings release dates and ex-dividend dates within each option cycle this particular calculator, which is Born To Sell's Roll Me calculator, is interactive -- your current position is in dark blue and the one you're comparing against is in grey; and you can click on any cell to compare against a different option:.

Using a covered call calculator that has automatically updating prices, integrated earnings release dates, and ex-dividend dates is a huge time saver.

This kind of calculator will help you optimize the time premium you receive each month, as well as keep you out of trouble by keeping you aware of important dates. The old way of using a spreadsheet with incomplete and non-updating information typically leads to sub-optimal results.

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By Symbol List Of Symbols Mentioned. Receive new blog articles automatically by following us: What does rolling a covered call mean? If you were to close today, this is your situation: Your covered call calculator should show you the difference like this: Ideally, your covered call calculator will let you compare many different options at the same time, and also warn you about earnings release dates and ex-dividend dates within each option cycle this particular calculator, which is Born To Sell's Roll Me calculator, is interactive -- your current position is in dark blue and the one you're comparing against is in grey; and you can click on any cell to compare against a different option: About Contact Press Affiliates Privacy Terms Site Map.