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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: ValueGuy who wrote (5137)4/5/2011 9:36:50 AM
From: alanrs  Read Replies (1) of 5205
 
I'm not sure what you're asking. There is nothing automatic about rolling a position, you have to actively do that yourself. And it does not involve contacting the broker, you close a current position (either by buying or selling) and then open a new position (either by selling or buying) at a different expiration or strike. It's two different transactions, the only one who knows (or cares) that you are rolling something out is you.

The only thing automatic is the exercise of the option, if it closes at or near (within a few cents) the strike on options expiration day. If you wanted to exercise an option prior to expiration you would have to contact the broker to do that, but I've never done it. Only a couple of times (out of thousands) has someone else exercised an option prior to expiration that effected me, and that didn't require anything of me either, it was just done, fair and square. I had sold the right (an option) to have that happen and someone exercised it, no problem.

Hope this helps.

ARS
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