Mitigating Losses by Rolling-Down During a Severe Market Decline: The BCI Trade Management Calculator in Action + Free Webinar Registration Link


Rolling-down is one of our frequently used covered call writing exit strategies. During the January 2022 contracts, there was a 5% market decline due to COVD-19, inflation and interest rate concerns. This article will highlight a rolling-down strategy I implemented with Healthcare Select Sector SPDR (NYSE: XLV) in one of my portfolios where a 4.68% share loss was mitigated down to a 2.8% loss. The BCI Trade Management Calculator will show trade entry, initial calculations, trade adjustments and final results.


Rolling-down trade overview

  • 12/20/2021: Buy 200 x XLV at $135.83
  • 12/20/2021: STO 2 x $137.50 1/21/2022 calls at $2.20
  • 1/7/2022: BTC 2 x 1/21/2022 $137.50 calls at $0.44 (20% guideline)
  • 1/11/2022: STO 2 x 1/21/2022 $136.50 calls (rolling-down) at $0.80
  • 1/21/2022: XLV shares worth $129.47 (a loss of 4.68%)


BCI Trade Management Calculator: XLV trade entry


XLV: Covered Call Trade Executed


BCI Trade Management Calculator: XLV initial calculations

XLV: Initial Covered Call Writing Calculations


Rolling down with XLV (broker screenshots)


XLV Roll-Down Trade


BCI Trade Management Calculator: XLV adjustment entries


XLV: Rolling-Down Trade Entries


BCI Trade Management Calculator: XLV final results


XLV: Rolling-Down Final Calculations



Writing covered calls and then mitigating losses by rolling-down decreased a 4.68% loss in share value down to an unrealized loss of 2.80% due to an option net credit of $512.00 or 1.88%. Position management is the 3rd of the 3 required skills (along with stock and option selection) that must be mastered before risking even one penny of our hard-earned money.


New Rolling-Out with the Trade Management Calculator video

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Selling Cash-Secured Puts 

Exit Strategy Choices After Exercise of Cash-Secured Puts 

Selling cash-secured puts is a low-risk option-selling strategy which generates weekly or monthly cash flow by agreeing to buy shares at a price we determine, by a date we determine. In return for undertaking this obligation, we are paid a cash premium. We only sell puts on shares we would otherwise want to own and, if exercised, and shares are put to us, they are purchased at a discount from the price when the put trade was initiated.

This presentation includes an introduction to option basics, defines selling cash-secured puts and provides real-life examples. The focus of the webinar details the steps available to put sellers should the put be exercised, and we now own the discounted stock or ETF shares. The seminar includes a discussion of the PCP (put-call-put or wheel) Strategy and the Stock Repair Strategy among other exit strategy opportunities.

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This presentation will provide all the information, with real-life examples, necessary to master the strategy of selling cash-secured puts. The program is divided into 6 sections:

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Covered call writing is a low-risk option-selling strategy geared to generating cash flow with capital preservation a key requirement. This presentation will demonstrate how the strategy can be crafted to benefit in all market environments. Market situations highlighted are:

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Image and article originally from Read the original article here.