rolling long calls up to follow a trend

traderlux · Feb 20, 2011

any one trading (or have traded) long calls (or bull call spreads) and rolling up to follow a trend?

spindr0 · Feb 21, 2011

Rolling the calls up and pyramiding them into a bigger position in the midst of a strong uptrend is an awful lotta fun until the underlying reverses hard. Been there, done that and owned the tee shirt once upon a time. How do you spell C-O-L-E-C-O ?

:eek:

JJacksET4 · Feb 21, 2011

Quote from spindr0:

Rolling the calls up and pyramiding them into a bigger position in the midst of a strong uptrend is an awful lotta fun until the underlying reverses hard. Been there, done that and owned the tee shirt once upon a time. How do you spell C-O-L-E-C-O ?

:eek:

But Profit taking, and rolling up the rest of the calls would have been good, no?

JJacksET4

Visaria · Feb 21, 2011

By rolling up, you mean buying a call waiting till the underlying goes up, sell the call and then buying a higher strike/later expiration, repeat?

Can be v profitable if the trend persists.

redwraith · Feb 21, 2011

I buy deep-in-the-money options of the SSO to trade the SP500 and do that all the time, especially since September while the market has gone basically straight up. It works fine, it just has the effect of forcing you to take a profit every once in a while.

Visaria · Feb 21, 2011

I think it would better to buy atm or maybe slightly out of the money calls and then roll those over.

athlonmank8 · Feb 21, 2011

Quote from JJacksET4:

But Profit taking, and rolling up the rest of the calls would have been good, no?

JJacksET4

lol easier said than done

But correct. Regardless, you won't be selling the top and time decay will nail some profits too.

athlonmank8 · Feb 21, 2011

Quote from Visaria:

I think it would better to buy atm or maybe slightly out of the money calls and then roll those over.

That's circumstantial. The tails are fatter farther OTM. If you're good, (or you're "good"

*wink*)....OTM are almost always the way to go.

donnap · Feb 21, 2011

Quote from spindr0:

Rolling the calls up and pyramiding them into a bigger position in the midst of a strong uptrend is an awful lotta fun until the underlying reverses hard. Been there, done that and owned the tee shirt once upon a time. How do you spell C-O-L-E-C-O ?

:eek:

A funny thing happened on the road to riches

traderlux · Feb 21, 2011

Quote from redwraith:

I buy deep-in-the-money options of the SSO to trade the SP500 and do that all the time, especially since September while the market has gone basically straight up. It works fine, it just has the effect of forcing you to take a profit every once in a while.

red,

how far out in time do you buy?
what is the "forcing" mechanism to take profits?
is it part of your trade plan?
do you buy any puts along the way for protection?
do you use any t/a as part of the plan?

i saw an example of rolling up using ditm calls in a webinar that was light on details and i was looking for some real world feedback. i like the idea of using an etf as the underly.

tia,
t'lux