Hey Dan
All good points, and I think it comes down to preference. I have learned (by getting burned a LOT), to take good profits off the table when you have them, and DON'T sabotage them for more gain unless the risk/reward ratio REALLY warrants it. In your case, you can roll up, but how much more do you really expect to make? Is it worth eliminating all cushion and downside protection in the stock? If it is, and you feel the potential for the big score is there, then it might be a better idea just to own the stock.
I guess the hard time I have with this play, and this stock in general, is that it is possibly a better "ownership" play than a CC play. Too many times have I gone into a CC situation and my stock runs up. Instead of being pleased, I immediately get pissed off because I convince myself I just lost money. (In actuality, I just didn't make as much as a pure ownership position). So, I buy back my calls at a loss, and before I can wedge into a new play, the stock pulls back to it's original trading range, and my NUT goes up, losing all my profts. I decided that unless the stock takes a fairly predictable pattern, I'm going to let myself get called (keeping with my original strategy), and move on, or get back in on MY terms, not the stock's. That whole "ownerships versus CCing" was the point I was trying to make. You made a lot of money quickly, getting greedy has almost always screwed me. Just trying to pass that on...:) Is 20+% not enough?..:)
Ryan |
