I had a similar situation of expecting more of a correction and selling a $345 strike for January. Once it broke to a new high, I purchased TSLL. I bought enough to make up the gains I missed out on at my next target which was $414, with a stop below the breakout level. I had been discussing this strategy for the last week or so. You can go back and see where I laid out the thesis and tracked the play.Colt98 said:
Curious what you would do with this issue. I have 100 shares of tsla stock. Sold 250 put and got put the stock months ago. I actually had sold puts multiple weeks before I actually got put the stock…. Once I had stock I started selling CC well let's just say I had the , I believe 280 calls sold the week before the election. I've rolled up each week breaking even on my premium to get higher steikes, but now I have the 320 calls sold out a couple of week…
So my question…. Should I just let it play out and loose the stock and move one.. should I buy back the contract, 10kish, and sell a strike closer to recoup some of those funds….
But the post below yours is the easiest. Just let it play out. You could also buy another 100 TSLA once you realize you are trapped. Those new shares can have a higher stop with the goal of participating in further upside.
You could sell a put above your trapped call but at a level that would be an understandable correction. Collect premium if it never comes down, and get shares back if it does with the premium of the call and put lowering your basis on the new shares.
holding onto my new shares!