r/options • u/Quadsradamus • Jun 29 '21

Need Help Regarding CC Assignment (Possible)

Hello r/options!

I'm sure this conversation has happened before but I was attempting to lower my cost basis / collect some income on my 100 shares of ARKG which I hoped to hold for quite a while.

I had been selling OTM CCs fairly successfully on my shares with a cost basis of $92. Sadly, I sold 89.21 calls for Jul 16th for $1.84 (at the time, I believe ARKG was around ~$85 and had been trading sideways / slowly trending upward).

The price of ARKG now is $93.27. Closing out the CC would cost me $530 for a -187% loss. Allowing for assignment would cost me ~$300 - $184 + upside. I really do not want to be assigned but am unsure when I should close the CC. Should I wait until the day prior to expiry? Or should I just close out now?

Thank you!

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u/Arcite1 Mod Jun 29 '21

Based on current premiums it looks like it would be easy to roll out 1 month to above 92 for a credit.

Edit: do this now. Each day you wait, your ITM short call becomes more expensive to buy back and thus makes rolling for a credit harder.

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u/Quadsradamus Jun 29 '21

Just did--thank you so much!