Oh No, Oh No, Oh no no no…

Fridays market ended a crazy up and down day, we could have ignored everything and be assigned to sell calls next week. Instead, we decided to not get assigned on all of our positions. Either way you can make good money, with the upcoming holiday on Monday we would have a short trading week so based on the companies I wanted to see if we could just roll out the contracts maybe several times.

I was trying to find a good definition of ‘Rolling a position’: Under Freedictionary.com we have a basic definition – It involves exiting the current position and immediately entering a similar position.

What does that mean? We buy the contracts that are expiring prior to the end of the day on Friday or before they can be exercised. So we are closing the contracts, but that costs us money so to offset this cost we then resell the contracts again for more money than we spent to close them, thus adding to our profits. We can try to adjust the strike price up or down but in this case we will leave it the same. We will adjust the expiration date out one more week though. So these new sold contracts will be for the end of next week.

Lets look at several positions that we rolled on Friday for some extra money:

  • GOLD – Bought for $0.07 and sold for $0.30, $23 profit per contract.
  • GOOGL – Bought for $0.25 and sold for $1.79, $154 profit per contract.
  • TSLA – Bought for $11.65 and sold for $13.95, $230 profit per contract.

That is another $1300-1400 in our pocket and we wont have to do any work next week looking for new positions or selling contracts on Tuesday morning. Sometime this can be an easy way to make a few extra dollars when something is coming up or you are going out of town and may be to busy to check on the markets.

The alternative was to just watch and wait with the prices hovering around our contract point. All three of these may have been assigned, we wouldn’t have officially known until Tuesday morning but that may depend on your broker. If we would have let that happen we could check Tuesday morning and then sell CALL contracts on our assigned positions.

I’m off to a meeting, researching new business opportunities and a new Blog platform.

This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.


Published by Jay

I came from a single parent house with four kids. My mom was a waitress and my sister helped pay the bills. I didn’t have any silver spoon in my mouth but I was able to break that cycle and I’m still learning about money and finances everyday. They just don’t teach you these things and it seemed like people didn’t want to share!

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