Jeff 9:58 am on Thursday, November 12, 2015
Tags: Earnings ( 3,108 )

NXPI and VLO management

#Earnings… got some movement today in stocks I was assigned through earnings plays.

$VLO, was assigned short shares at 65.00. Been selling puts and calls, raising my cost basis. Today closed some Nov 13th 71 calls for .08, and sold a Nov 27th 65 covered put for .55

$NXPI was assigned long shares at 86.00. Yesterday sold Nov 20th 85 covered call for .95, and today a Nov 20th 75 put for .60. Lowering my cost basis by selling premium.

lk570 3:34 pm on Thursday, November 12, 2015

From your experience, could you please share the pro’s and con’s of keeping rolling vs getting assigned then sell calls?
- Tom 9:38 am on Friday, November 13, 2015
  
  I took assignment of $AMBA shares and will probably be selling calls for a long time, but it was better to me than a relatively big loss. It had dropped so much, so fast rolling was out of the question, for me anyway.
Jeff 4:08 pm on Thursday, November 12, 2015

The advantage is you give the trade more time to regain its losses (or in the case of VLO, retrace from its gains), and while waiting you can bring in additional premium by selling covered calls/puts. The cons are, it doesn’t always work… sometime stocks take too long to return, or never do… or you can get stuck with stock during a correction that’s going down too much with the rest of the market. I can say that the method has saved several trades before, but it has also meant hefty losses in other cases. I haven’t lately examined how much effect it has had on long-term gains of the strategy. I do prefer to take losses in some situations.