Roll, Close, or Wait? Managing Cash Secured Puts and Covered Calls: 

Online at Udemy. Unlock the flexibility of cash secured puts and covered calls to manage your trades effectively as expiration approaches. Learn how to use this flexibility to your advantage.

Course Overview

Patricia Saylor, founder of Saylor Financial Fundamentals, has guided hundreds of novice investors and option traders from 62 countries through 1:1 coaching, Udemy classes, and her book, "The Novice Investor's Guide to Stocks, Funds, and Options." With a lifelong career in education, she excels at simplifying complex concepts, structuring information logically, and providing clear examples.

Course Content

When selling an option contract, as expiration nears, it may be in the money or out of the money. Depending on your trade goals, there are multiple paths forward. This course will help you choose the best path to achieve your targets.

Learn to assess whether action or inaction is the optimal strategy. Discover when to let a contract expire, roll a position for additional income, or buy to close a contract early to free up capital and lock in gains quickly.

Ideal for Continuing Learners

This course is designed as a follow-up to two other novice options trading courses: "How to Sell Cash Secured Puts: Safe Options Trading" and "How to Sell Covered Calls: Safe Options Trading Strategies." However, if you are already comfortable with these strategies, you can start here!

Key Skills You'll Gain

• Calculate Projected Annualized Returns: Learn the formula to evaluate potential returns on contracts you’re considering selling, rolling, or closing early.
• Compare Options Effectively: Make informed comparisons when selecting strike prices and expiration dates.
• Understand Value Relationships: Grasp the connection between share prices, extrinsic, and intrinsic value to plan trade adjustments.
• Identify Your Breakeven Point: Know how to calculate and use your breakeven point in decision-making.
• Use Dividend Information: Use dividend data to select expiration dates and decide on contract assignments.
• Develop a Trade Log Spreadsheet: Create a comprehensive trade log to track your campaigns and support your decisions (with formulas provided or access to a pre-formatted template).

Interactive Learning

Engage with review questions and homework exercises to apply your new knowledge practically.

Final Project

By the end of this 90-minute course, you’ll be ready to create your custom spreadsheet and analyze a hypothetical trade setup:

Trade Setup:

• You own 225 shares of hypothetical stock ABC, purchased at $70/share.
• Current share price: $75.
• Last month, share price: $77.
• Sold a covered call with a strike price of $77.50, receiving $92.
• Sold a cash secured put with a strike price of $76, receiving $84.
• Both positions expire 30 days from the sale date.

Assignment and Questions:

1. Enter trade details on your spreadsheet for analysis.
2. Calculate your gains on the share price for the 225 shares.
3. Determine your total investment, considering the premiums received.
4. Compute your average investment per share.
5. Find the annualized return on each option position.
6. Analyze the outcomes if the share price remains steady at $75 at expiration.
7. Predict the fate of the put and the covered call.
8. Describe the outcome if you choose to do nothing.
9. Explore other management options for the contracts.
10. Explain your recommended course of action and why.

Try your hand at this analysis and find the answers at the end of the course.