I just had my UNH shares called away early, and while a profit is still a profit, this one stings a bit. I sold a covered call a few months back when the stock was trading completely flat, only for the share price to suddenly spike and leave my position deeply in the money. I tried my best to salvage it by rolling the contract out and up, but the momentum was just too strong, and rolling nearly two months out was barely giving me an extra $2 on the strike price. Even though the contract had two weeks left until its official expiration, the holder decided to exercise early, forcing me to part with the underlying shares for a much smaller gain than I could have had. It is what it is, and I am consoling myself with the fact that I still walked away with a green trade, but it is a classic reminder of the capped upside risk with the wheel strategy.
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- ElvisMarner·06-15 18:03Early assignment on a flat-name covered call is brutal lol. I’ve had rolls like that where the extra strike barely moves — did the remaining extrinsic get too thin?LikeReport