The price of $FXI is going in the wrong direction. And as we know, only price pays. Price is truth.
Due to two previous "covered call" premium sales against our long January 2026 35-strike calls and more than one year until our long calls expire, I'm going to get creative with our position to keep the dream alive. I think we can afford to be patient.
I'm confident in doing so because ending the campaign here would only result in a small loss. So there's no panic.
Here's a visual of where we are now:
The purple circle is where I purchased both my long January 2026 calls and sold Dec 35 calls against it. The green circle shows where I rolled my Dec 35 calls to Feb 35 calls for a credit. At the moment, my net cost (max risk) for these Jan 2026 $35 calls is $2.05. This is derived by subtracting the credits for the two short call sales from the cost of the long calls.
I've still got a lot of time until January 2026, and while the chart of FXI is currently disagreeing with me, I can make time my friend. Time heals all wounds, right? We'll see.
Here's the Play:
I like rolling the short February 35 calls down to the Feb 33 calls strike for an approximately 26-cent net credit. This is a vertical roll. I'm keeping the short calls in the same expiration series, and this creates a diagonal spread.
Doing this will bring in more credit, lowering my exposure if $FXI continues to trend lower in the near term.
I'll look for additional opportunities to bring in more credits down the road. Either by performing another vertical roll as I'm doing here today, or rolling out to March when the premium in these Feb calls falls below 25 cents.
If $FXI finally reverses, then whenever my short calls go in-the-money ($FXI is trading higher than the strike price), I'll look to roll these calls up a strike (or two) and out to the next month. As always, I'll keep everyone updated on my every move in $FXI in the ASO chat, on this blog, and in our weekly Option Jam Sessions.
