We favor selling calls against long stock, which is known as a. The strategy reduces our and by doing so mechanically we can the position forward to continuously lower the breakeven. What is the best way to roll a covered call?
A study was conducted using SPY (S&P 500 ETF) from 2005 to present. We sold Covered Calls with a 30and then compared waiting until and then rolling the short call to the next month. The second strategy was to wait until the extrinsic value of the option dropped below $0.25 and then rolled the call to the next expiration (or held to the current expiration if that wasn't possible).
Watch this segment of “Market Measures” with Tom Sosnoff and Tony Battista for the valuable takeaways, the detailed study results and other insights on rolling Covered Calls and how to improve your cost basis.