Key insights
- An investor is facing a dilemma with a deep in-the-money covered call on QQQ. The investor is exploring strategies to mitigate potential losses or tax implications, including rolling the call, assignment, closing the option, or buying more shares. The situation highlights the risks associated with covered call strategies in a rising market, where potential upside is capped and early assignment can lead to unexpected tax consequences.
I’ve rolled the call multiple times. Qqq expires June 15.
Right now my call is 610 strike on QQQ.
Lost quite a bit of upside.
The value of my option is -30k. Last was 1.84
I’ve held qqq underlying for over a year with a 44k gain of I get assigned
I’m trying to think thru options here but only things I can think of are :
1 roll again 2 get assigned and take the tax hit 3 close out the option and pay the cash 4 buy shares today at higher price to realize a near net 0 loss but again would be shelling out a lot of money to do this just to preserve a gain. Don’t think it makes sense
What other options do I have ? Can I buy or sell puts or calls to limit damage ?