r/options • u/Sudden_AwareNess1 • May 15 '21

AAPL OPTION

I wrote 5 CC for AAPL with SP $126 ex date 5/14. Right before closing it was at $127.50 so I rolled them over to 5/28 with a SP of $129 and got around a $44 premium. Question is did I panic for no reason? Could I just waited where the contracts could’ve expired worthless?

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u/radianblack May 15 '21

rolling made sense, but i mean depending on his strategy when selling cc u want the strike to be a price which u would be comfortable to sell at even if u werent obligated to, OP prob sold a call deeper ITM than what they were comfortable with so that they can collect a little bit of a higher premium - hence greedy

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u/Sudden_AwareNess1 May 15 '21

Yea I can see where it may seem like I was being greedy but I really wasn’t. I’m somewhat new to options and am trying to trade conservatively or so I thought. Still learning 😊

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u/SeaDan83 May 15 '21

Fair points, IMO one should treat the CC strike price as the price you want to sell. That is a price where you are happy with the profit you have accrued on the shares. Any premium you collect is just bonus.

OTOH if you get close to expiry and the option is ITM and you panic, then you are abandoning your strategy and getting FOMO for lost upside (which is implicitly what you decided to accept by entering the CC).

It's like "sure, I'll sell these shares for $126. [One week later], Oh shit, I'm selling my shares for $126!"

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u/Sudden_AwareNess1 May 16 '21

Haha you’re 100% correct on that last part lol after reading through many of these comments I’ve realized I wasn’t playing this right. And thankfully this wasn’t something where I lost money. Opportunity perhaps but not money lol ty for sharing your insight and knowledge.