Jan, ASND options ramblings follow:
Caveat: The below remarks are alternatives and should not be taken as recommendations. Naturally, follow your own instincts, observations and arithmetic.
Based on posts 45005/45056, I assume the following:
* Your underlying position is cash-based, NOT on margin;
* All open option positions (written calls) are covered;
* You've written calls against all of your underlying position;
* Cost basis for the underlying is at/below $33.
It also sounds like your use of covered options is for income vs. protection? If so, this is considered an aggressive view (aka, higher risk).
Enough preamble. Here are some rules of thumb for May 40C (assuming time value):
a) ASND falls below 40. Conservative player liquidates the position by closing (buy back calls) and selling ASND -- as a "net" order. Aggressive player rolls-down by closing and writing lower strikes (eg, 35).
b) ASND rises above 45. Player rolls-up by closing calls and selling higher strikes (eg, 45). [NOTE: At today's market close, May 40C is overvalued relative to 45C -- the relationship would likely reverse should ASND rise much above 45. So, roll-up looks premature.]
c) ASND stalls. Maintain the position and enjoy time decay.
Should time value disappear (near expiration): player rolls-out by closing and buying later series (eg, Jun).
BTW, any of the above "rolls" can be partial -- say, 50% of your position. This is particularly useful if you anticipate a quick reversal, but are unsure.
You may wish to let your May 45C run until deeply in/out-of-the-money, at which time the above rules apply. The May 40C deserves close attention, however.
Good luck.
ps. You mention writing "uncovered" puts on ASND, yet you already have a significantly bullish position. In principle, writing "uncovered" puts on ASND is no different than uncovered puts on XYZ. Nonetheless, the possibility of losing money twice on ASND sounds traumatic. |
