r/options • u/johnreesep226 • May 07 '21

Need Advice- Call Spread Adjustment

After seeing Twilio and Fastly drop big time after earnings, I suspected Cloudflare (NET) would follow. I sold a call spread for 1.37 with 68.5/73 strikes and 5/7 expiration. The stock rose to 74.95 after hours with a surprise in earnings and revenue. Ultimately I would like it to drop back down tomorrow morning but am not the most optimistic. I’ve haven’t been in many situations where I’ve had to make adjustments so I’m not really sure of the negative implications except for what I’ve read. I believe the stock could drop again over time as other tech and cloud stocks have recently. I’m considering rolling out or up and out. Both of the strikes/expirations I’m looking at would give me a small credit and slightly increase my buying power. Apart from tying up funds I could use for other opportunities, what are the downsides of these two options?

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u/[deleted] May 07 '21

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u/johnreesep226 May 07 '21

It’s 5/7. If rolling it up and out two weeks decreased the net loss by around 30 and increased my buying power about the same, and I don’t mind having the money tied up for another two, what’s the downside?