After being assigned shares from a cash-secured put, the timing for selling your first covered call matters. Here are the key guidelines:
- Immediately (within 1-3 days): If the stock is stable or recovering and IV is elevated, selling a CC right away starts the income clock immediately. No reason to delay.
- Wait for a Bounce: If the stock dropped sharply into assignment (e.g., after bad news), waiting a few days may allow IV to settle and the stock to partially recover, enabling you to sell a higher strike CC for similar premium — improving your "called away" exit price.
- Expiration Timing: Target the next 21-45 DTE expiration. Do not sell a CC with only 5 DTE unless you specifically want aggressive theta capture.
- Never Below ACB: No matter when you sell, never sell a CC below your Adjusted Cost Basis. This would lock in a guaranteed net loss on the position.
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