No. of Recommendations: 0
So, I closed my January $350 calls at a loss, and wrote new January $365 calls instead.
The time value in the $350s has fallen a lot, from the original $19.35 to $16.89.
This is because time value peaks when the stock price is at the strike price. As the stock has moved up, the time value has fallen.
So, that takes a few dollars of sting out of the mark-to-market loss I'm now realizing because the calls I wrote are now in the money by about $12.90.
So, the trades, including commissions:
Buy to close Jan $350 calls for $29.79, breakeven $379.79
Sell to open Mar $365 calls for $23.91, breakeven $388.91
I don't understand in what sense $379.79 is a breakeven?
The net premiums received are: +19.35 - 29.79 + 23.91 = +13.47
And with the $365 call, isn't your new breakeven = 365 + 13.47 = $378.47
Always willing to be wrong ...
