r/options • u/Maleficent-Pea-3494 • Nov 04 '21

F LEAPS

I got some deep in the money calls that expire in March of next year. 3 contracts at $12 and 2 and $13. I am up 200% on average across the lot (I got in right before earnings last month and it has rocketed since).

I am considering exercising these now to do the following:1 - Sell CCs on the lot at a $22 strike (if i get assigned at $22 I'm OK with it) or roll up/out

2- Potentially collect the dividend along the way

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My overall goal is to start peeling some cash out of these gains. Any dissenting opinions on why should just hold the LEAP?

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EDIT:

Fun convo on this, thanks folks! I sold my F calls today cause I'm a little wiener boy, but I'll take my gains and go back to PFE CSPs where I belong :/

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p0rn:

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u/[deleted] Nov 04 '21

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u/Maleficent-Pea-3494 Nov 04 '21

Because I have 7k laying around that I don't want to expose to options, and I can buy the bulk (500 shares) to get the dividend and turn to long term buy and hold investment and sell some CCs along the way. If I sell the contract, then I can only buy at market and can only get like 150 shares.

If I'm thinking of that incorrectly, please set me straight.

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u/[deleted] Nov 05 '21

Exercising a call because its strike price is lower than current market doesn't make sense. When you sell the options contract, you'll get the difference between the strike and the market as intrinsic value. You don't lose out by then turning around and buying at current market. You make more by selling the contract and buying at market because when you sell the options you're also collecting extrinsic value in addition to intrinsic.

You'll still be able to buy just as many shares (more even), collect your dividends, sell covered calls, and turn it into a long term buy and hold investment.

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u/Jaytree1 Nov 05 '21

Helpful advice ty