Just a few days ago (3/19) GIGM was at $12.37 and I wrote an April $12.50 call for $.85. Since then the stock has moved up to the $14.30 range. The time premium of the option has dropped to about $.30 so I though about buying back the option.
I put in a trade to buy back my April $12.50 call and sell the May $15 call for a net debit of $.90. I was filled paying $1.77 for the April call and getting $.87 for the May call. Commissions were $11.20.
Does this make sense? My thoughts are that I can now participate in any stock gains up to $15 vs. my previous strike of $12.5, my sold premium is about a wash, and expiration is out another month. This will work great if GIGM keeps rising.