MYMWFY

 August 29, 2023 So, SPY went up 1.45% today ($6.40 / share) to finish at $449.16.  This put my 445 covered calls expiring today way out of the money.  At close yesterday, SPY was at about 442 and a 445 strike had a 16% delta...  until news of a reduction in job openings and lower bond yields caused a rush to buy in the market. So, at the end of the trading day, I rolled my 445 covered calls to 449, expiring in 14 days on September 12 for a net premium of about $0.27 / share. What should I have done? Right now, I'm thinking that as soon as SPY hit 444, I should have rolled up and out before getting swamped...  Ideas?

There has been a lot of volatility in SPY these past couple of weeks.  Last week, we heard news of the slowdown in China, which sent share prices down over 2%.  This week, there was a pop in the market because Nvidia had a huge beat.  This caused my covered call on SPY to go ITM, which resulted in a nice gain at the end. Recently, I have been targeting about 15% deltas for daily SPY covered calls since this seemed like a good balance of risk and reward.  This also roughly equates to a 1% lift in SPY per day, which is intuitively implausible. Well, on August 22, 2023, SPY jumped from about 438 to about 443, a 1.1% increase and my 442 strike would close ITM.  Luckily, I was able to roll up and out by 2 days (an August 25 expiration) for a 445 strike (delta = 39%) with a positive premium of 0.28. Luckily, the market regressed and SPY closed at 438 on August 24 and I was safe again. date spy price strike expiration date premium delta spy closing share price close ou...

*** August 29, 2023 Update *** Looking over SPY prices over the last month...  the price of SPY bottomed out on August 17-18 to close under 437 both days!  And these were the lowest prices over the last 30 days!  So, if I would have held onto my June 14 covered calls, I would have been OTM for the exact expiration date!  Ugh! Introduction So, my MO in options trading has been to sell covered calls and roll them up and out if there’s a risk they will be assigned.  (I don’t want to lose the shares and do “the wheel” because I don’t want to wait until the transaction closes to keep trading.) This has generally worked well.  However, recently, I was stuck having to pay over $10 / share of SPY to keep from being assigned… What happened?  I’ve been generally selling one and two days until expiration covered calls on SPY to take advantage of the huge thetas near expiration.  I usually have a delta of no more than 20% and when I do roll, I try to Make net...