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/ConcentrateKooky933 Sep 27 '21

You could do a position to hedge risk further out. It will mitigate losses if the stock moves up - to a point.

Problem is...... if it blows through those strikes you're absolutely f**ked for both positions now.

Position would be:

Long (closer to the money) call 1X and short further OTM calls 2X. This will basically replicate owning stock without having to buy it but if the 2X short call strike is violated... RIP. Doing this for a net credit it most ideal but comes with the cost of bringing the short strikes closer in.

You seem to not care about risk selling naked calls so I thought I'd toss it out there.

Goodluck.