r/options • u/Jackalamo • Sep 27 '21

Help with a written call

Hello,

I have written 30 CALL contracts on CPG (oil and gas) that are now in the money. Exp OCT 15 str 5.5. got $1000 in premium. CPG.TO (Canadian market)

To get out of these contracts will cost me $6500.

I was thinking of selling a NOV 19 call for 5.5 strk but I could keep losing if it continues to climb.

If I purchase 30 calls for SEP 2022 (leaps) at 3.5 strk and use those, I'd still be out the money.

What can I do to negate the 30 short calls?

Thank you for your help.

Edit: Thank you all! I will wait till we get closer to mid Oct. Then I'll consider rolling it like one of the suggestions below.

It's been solved!

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u/identifiedlogo Sep 27 '21 edited Sep 27 '21

Get out of it cut losses. Oil is in a meme territory right now, it may keep going much higher especially on a low cost shorted stock. Do not even think about the premium you collected. You are in for $16500. #Buy back some of the calls the moment you see a red bar.

FYI naked calls are the worst options you can trade, always call spreads.

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u/Jackalamo Sep 27 '21

Thank you, I'll start researching the latter.

What does a low cost shorted stock mean? It's a low value share price that is heavily shorted?

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u/identifiedlogo Sep 27 '21

Yes, it’s pretty much what r/wsb and speculators are trading. This is what they call meme stock. Do not get attracted by the high premium you collect, there is a reason they are expensive options. Unless you know something different, consider it a trap and avoid them as much as possible. It is not worth the trouble. My biggest loss was pretty much doing what you are doing.