Rolling a call option

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.

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4 Responses to “Rolling a call option”

  1. Jennifer Says:

    I’m really interested in selling Covered Calls but I’ve never traded before. You seem to be an expert. Can you recommend how I can learn all the strategies without taking a $3000 course? Also how to enter trades and strategies with an on-line broker?

    Thank you!
    Jennifer
    email: millertrinh2003@yahoo.com

  2. Tim Says:

    Jennifer,
    I hope reading through this blog helps you get some understanding about covered calls. I have been reading about option trading for years, and finally wanted to give it a try so I opened an account using the funds from a small IRA I had in a mutual fund. I started with about $4000.

    I think the best way to learn is to just open an account and make some trades. Once you have an account (I use Trade King) you will find trade screens set up for the different option strategies. There will also be research tools to help you find trades. I use and option screener to find stock in the volatility and price ranges I am interested in.

    I have found that I am developing a strategy that works for me and my temperament. Everyone that trades has their own style. Read the blogs in my blog roll and read others that you find interesting.

  3. online stock trading advice Says:

    Hey, I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say GREAT blog!…..I”ll be checking in on a regularly now….Keep up the good work! 🙂

    I’m Out! 🙂

  4. Unsomoassexal Says:

    awesome blog here also the css is nicely done


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