I am also interested in CC repair, since I have lost many dollars when stocks unexpectedly rise. BVSN and PMCS are two examples. I got into BVSN at the split adjusted price of 11, and PMCS at 45. Have not participated in much of the run because of the CCs.
I guess the only way, if one sees continued upside, is to buy the calls back. Since I sold the calls in the first place, I am always amazed when the stock passes my price so quickly. This is what I have come up with.
I will monitor the stock until it passes the strike. Once it does that, the rise in premium slows just a bit (percentage wise). I have been buying back just a portion of the written CCs. If the stock continue to rise, I can eventually exercise the option, take the loss on the buyback as short term capital loss, and preserve the gain. If stock stalls or falls slightly, at least I am making something on the time value.
This does not seem to work very well, but that is the best I can come up with. I am very interested in listening to other suggestions. CC is a great way to generate steady returns in a flat or slightly bullish market. But it does limit one's upside.
Seldom Blue |
