This is one of the most common questions I get. My answer? Not that often. Ideally, I’d love for every trade to work out perfectly—stock goes up, I make money, and the call expires worthless so I can roll to the next strike. But markets don’t work that way.
Here’s my approach to adjusting covered calls:
If the stock moves through my short strike, I’ll roll up and often out.
If it moves down to my good-till-canceled (GTC) limit order, I’ll look to sell another call.
If the price movement is small, I probably won’t need to do anything.
To make this easier, I track a watchlist and simply check the net change column. If the move is too big in either direction, I take action. Otherwise, it’s business as usual. Simple, effective and stress-free.
Trade smart.
#OptionsTrading #CoveredCalls #InvestingStrategy #TradingTips
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