ROLLING VXX JUNE 10TH 17.5 SHORT CALL TO JULY 1ST 17 SHORT CALL
This is part of a poor man's covered call setup in VXX, the back month of which is a September VXX 12 long call.
I'm being somewhat mechanical here in rolling the 17.5 short call to the July 1st 75% probability out-of-the-money short call. I say "somewhat mechanical" because the usual thing to do is to wait until the short call is near expiration and then roll it out for another 30 days (assuming you haven't yet taken the whole setup off in profit before then).
The notion here is to have my three VXX poor man's covered calls kind of straddle Brexit/FOMC, which is when I think the best chances for a volatility pop will occur.
In any event, picked up an additional $56 credit for the roll, further reducing my cost basis in the long. Given the credits I've received so far for the rolls, I'll look to take the entire setup off for what I paid for it ($418/contract). The credits collected for the rolls will be my profit for the setup.
I'm being somewhat mechanical here in rolling the 17.5 short call to the July 1st 75% probability out-of-the-money short call. I say "somewhat mechanical" because the usual thing to do is to wait until the short call is near expiration and then roll it out for another 30 days (assuming you haven't yet taken the whole setup off in profit before then).
The notion here is to have my three VXX poor man's covered calls kind of straddle Brexit/FOMC, which is when I think the best chances for a volatility pop will occur.
In any event, picked up an additional $56 credit for the roll, further reducing my cost basis in the long. Given the credits I've received so far for the rolls, I'll look to take the entire setup off for what I paid for it ($418/contract). The credits collected for the rolls will be my profit for the setup.