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Tales of a Technician: Managing ITM Covered Calls

March 7, 2022

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There are 11 days left until March expiration. Suppose you have an ITM covered call. What are your choices for management and what are the tradeoffs for each? Today’s video has the answers.


  • I have 100 shares of AMGN bought at 216.25. After two covered calls the cost is $211.66.
  • Now I have 18MAR 230 Covered call $226 sold on 2/23. The stock is ITM with 11 days to go with extrinsic value of $211.
  • Also, I have 18 March 210 short Put at $182 which may expire worthless.
  • What should be my management?  Roll over the short call when extrinsic is close to zero or let them take away my stock and sell another short put at appropriate time?

ITM Cov Call

  1. Roll quickly if you’re really bullish on the stock and want to uncap your gains.
  2. When to roll up: Wait until the time value gets close to zero.
  3. Allow assignment, capture max gain. Then you could sell a naked put for the next month.

Most aggressive: Roll the covered call to April and maintain the stock position. (higher reward, lower probability)

Least aggressive: Let them take the stock, sell OTM naked puts. (lower reward, higher probability)

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