Monday, June 11, 2012

Make $300 with ITM short call $aapl

heres my situation, still have June575 short calls expiring on friday.. what to do , what to do. current prices:

Stock at 587
June 575 short call $15.50(of that there is still $3.50 in time premium remaining, $350 per contract)
July 575 short call $28.50 ($16.50 of time premium)

at first glance you might worry about that ITM june short call since price of stock is above the price of the call.. but as you know (or as i hope you know)..come friday for opex, that $350 will have decayed away to my benefit (profit). with the EU uncertainty hanging over everything this summer im leaning towards rolling this short call to same strike for July to give me good upside (that $16.50) and having excellant downside protection (the $28.50 if it closes below 575 for july)...the July 575 will decay a bit by friday, but by sitting tight and squeezing out the majority of that $350 time decay for June, you can make $300 per contract.. remember with diagonal is made by sitting not trading.

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