Rolling Up vs. Trailing Stops (Preview)

By Lawrence G. McMillan

In The Option Strategist Newsletter, we recently had a very nice profit on a long run by the Silver ETF (SLV). We rolled that position seven times, each time taking a credit from selling a relatively deeply in-the-money call option and replacing it with an at-the-money call.

There are a few advantages to this approach. First, one is constantly putting money in the bank, since each roll is done for a credit. That’s a big psychological edge in my opinion. When you know you’re “playing with the house’s money,” you can think less emotionally about your next move. Second, if a major reversal occurs, you only lose the price of the last call you purchased – all the other credits are already in the bank. That happened here, when SLV dropped from 110 to 65 (intraday high and low) in less than two full trading days, on January 29th through February 2nd.

Our Trades

We originally recommended the purchase of the SLV Jan (16th) 45 calls in the November 24th, 2025, newsletter. We paid 2.70 for those. Here is the trading history, going forward from there. We originally rolled up the strikes every 7 or 8 points, but eventually were rolling up every 10 points. The actual prices we recorded in our model portfolio are shown in the table below, including commissions. For all practical purposes, SLV was at the indicated strike when the calls were rolled up. We never rolled to the 110 calls, because SLV never traded at 110, although it came close.

The chart below shows the graph of SLV and the points and frequency at which the rolls took place. The “Who cares” notation, means that when the ETF finally imploded, we only lost the last call premium, so “who cares?”

A Different Approach?

But this is not necessarily the optimal approach...