M, Re: followup action in your situation. First, I'm curious, why did you write 10s 8 months out with the stock at 12 if you wanted to keep the shares? But given where you are (especially now that CS is near 18) rolling to the 17.5s may allow you to net something like 5 pts instead of the 2.5 you planned on, but your break-even point has zoomed up to 12.5 from the original 7.5. So, as always, you trade risk for reward. Seems fairly safe, but I don't know the company very well.
One thing I've decided is that it is important to plan out under what, if any, conditions (amount/direction of price movement, time left, etc.) you will pursue follow-up action when initiating a position, then stick to the plan. Once you find your covered call deep in the money, especially if not much time has passed, you'll see that your choices are usually quite limited (risk/reward wise) and personally, because I'm income oriented, I probably would just close out the position taking the initial premium and moving on to new opportunities. |
