Some folks are bigger traders than I. Some folks sell further out in time, with the intent to buy back at a lower cost and resell closer in-at a lower strike price the market fluctuates; they usually sell further out because they can sell at a higher strike price and for a larger premium and have more time to take advantage of market fluctuations. Some sell closer to ITM and they are more liable to take advantage of mid-month dips to exit and maybe resell.
For me, I perceive less risk of getting called by selling less time. I figure I have a better feel of the market short-term. Because I want to keep my stock, I sell well OTM, usually one month out with the intent to let them expire worthless. If Qcom dips and I think it may go lower, I may buy back and resell at a lower strike price. I may buy back before expiration in order to sell the next month out before this month expires, figuring I get a better price than waiting until the first few days of the week following expiration. Sometimes, like last month and this month, I wait to sell until Qcom seems to have peaked and patiently waited to to sell until about 2 weeks into the month. It really depends on market conditions. But, for me, the basic strategy is to sell OTM and let them expire, but it changes somewhat based on how Qcom is performing in the market.
With stocks other than Qcom, that are not as volatile, I sell and let them expire; with those, I don't have enough shares to make it worthwhile commissionwise to do much trading in them. I just pocket a few hundred bucks and don't watch that carefully. It's only Qcom and Amgen that I have enough shares to watch carefully and big unrealized LT gains to worry about avoiding exercise. |
