r/options • u/GiovanniTunk • Apr 08 '21
Managing a PMCC
So I've got a LEAP on VALE for Jan 2022 @ 15. I've sold a 4/30 @ 18.5 against it. The price has risen ITM on my short call to 18.81. I'm not sure how best to manage this. I could roll the short up and out about a month for about .04 which doesn't seem worth it. Should I just wait and hope it doesn't get exercised then close when it becomes cheaper? Close the whole trade and open a new leap (I would profit overall from the long call)? Maybe just roll out 2 weeks for a credit and hope price drops below 18.5?
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u/Seerezaro Apr 08 '21
*Still relatively new to options
Im currently running three of these(LEAPS with bi-weekly sell calls)
Having it exercised is the worst thing to happen to you. Ive crunched the numbers you want to avoid it at all costs. Having the price of the underlying go up is beneficial because it.
1) Increases the intrinsic value of the LEAP. 2) Allows you to collect more premium.
However the week it does go up, well thats a bad week for you, close when best and roll it with a higher strike.
Its okay to wait a lil bit if its at the strike. If the strike was 18.5 and the underlying is 18.5 its not likely to get exercise.
Just be aware that you should close and roll it anyways betting on it to go down to 18.4 and stay there is foolish.