Rolling ITM Calls

I’ve had a few traders ask how I’ve been handling the SLV moves lately—especially after an incredible run-up and then some very sharp drops. This post is the written companion to my “SLV Roll Call” video, where I walk through exactly how I managed a covered call that needed attention. Obviously this uses the SLV ETF as an example but the concepts can be applied across a wide range of use cases. None of this is financial advice. This is simply what I do.

If you want the full walkthrough first, here’s the video:

SLV Roll Call: Manage Underwater Calls (YouTube)

Quick context: I treat this SLV Covered Call technique as part of an “underlying campaign”

SLV is the ETF I trade most frequently. When volatility spikes, I’m not thinking in terms of one isolated trade—I’m thinking in terms of a campaign: long shares + option positions layered over time. That framing matters, because when you roll, you’re not “resetting” reality—you’re just moving risk and payoff around inside the same campaign.

Step 1 — I start with the full payoff curve (shares + short call)

A covered call is not just “premium income.” There is a larger P&L curve that needs to be taken into context.

In the video, I first isolate the option so you can see what the call is doing by itself, and then I include the underlying shares to show the real covered call P/L curve. That curve makes the key trade-off obvious: the short call caps upside. If your strike is too low relative to how you want to manage the position, you’ll feel boxed in. This means that you are already profitable, you should consider this as a win. However you can roll out to extract a bit more profit and to delay the long term tax implications.

Step 2 — I close the existing short call (yes, even if it realizes a loss)

This is where people get tripped up psychologically. Rolling option position will often front load a realized loss. We can compensate for the loss by gaining extra unrealized gains on the underlying and offsetting the debit with other tactics.

I sold the original call for a credit, and later I bought it back for a higher price. On paper, that’s a realized loss on the call leg—but the only number that matters is the net between what I collected and what it cost to close. In my example, the repurchase debit looks big, but the realized loss is much smaller once you net it against the original premium.

That netting process is a big part of staying rational during management.

Step 3 — I roll the call up in strike (to reclaim upside)

After closing the old short call, I roll to a higher strike call. Most brokerages allow you to complete this step and the one before in one order but I split them out here to make it easier to understand. The goal is simple: if I’m going to keep running a covered call structure, I want to lift the ceiling on what the campaign can make if SLV moves in my favor.

This is one of the cleanest reasons to roll: the market moved, and the strike you sold months ago may not match the trade you want to own today. If I allow my call to get "assigned" I will have to pay the taxes on the gain of the underlying as well if I am trading in a non-tax advantaged account.

My core rule: “ABCs” — Always Be Collecting credits

I say it in the video because it’s my anchor: This is a guidline and not a law; it helps me frame the primary goal I have for my portfolio. I don't need to "win" every position or every trade but I do want to increase my upside as I move along my strategy.

ABCs: Always Be Collecting credits (See what I did there 2 "c"s)

That doesn’t mean every adjustment is a home run. It doesn’t remove risk. It means I’m trying to structure management so the campaign continues to take in premium over time while staying covered. Over time I collect the time decay (theta) and my portfolio grows in a tax efficient way.

Even when the “credit” on a single adjustment is small, it keeps the math pointed in the right direction.

The advanced add-on — selling a put and “inverting” the structure

In the walkthrough, I also layer in a more advanced move: I sell a put in addition to selling the new call.

I describe this as “inverting” when the put strike is above the call strike, and I’m clear about when I think it makes sense: typically employed only when you’re already very underwater on the call side, because that underwater call provides a bit of a hedge in the overall structure.

This is not a beginner covered call move. Adding a short put changes the risk profile—so treat it with the respect it deserves.

Step 4 — I pull the expiration closer to increase theta

One detail I care about a lot: time.

In the video, I move the expiration from farther out back into a nearer month, and the reason is theta. Moving closer in time increases the rate of decay I can potentially harvest, which matters when you’re actively managing a premium-selling campaign.

The unsexy edge: I track everything in a “campaign” spreadsheet

If you roll often, the biggest hidden risk is losing track of what you’ve actually done.

I use an option tracking spreadsheet that logs each open/close, credit/debit, and cumulative outcome. It’s a little manual, but once you do it consistently, you can see the campaign clearly—wins, losses, and whether your “ABCs” are showing up in real results.

I’ve found this to be one of the best ways to keep your management honest. Subscribe to the YouTube or blog and send me a request and I will send you a copy for free.

My SLV “Roll Call” checklist (how I decide what to do)

I’m usually running this sequence:

I look at the full payoff (shares + options), not just the option leg. 
I net any buyback against the original credit so I understand the real realized outcome.
I roll strikes to reshape the upside cap and keep the campaign pointed where I want it.
If I add complexity (like a short put / “inversion”), I do it intentionally and only in an appropriate scenario like I described.
I log it—because if you don’t track it, you’re setting yourself up for confusion down the road (trust me it make sense huge difference. After you have a few campaigns under your belt you will be able to look at the historic orders and grade your performance.

If you want to reach out you can contact me at: AJ@optioneur.com