Paying $$ to Chase Stock Appreciation

Management is key to successful enhanced income investing. One of the issues that arises is what to do when a stock rises above your strike price?

I'm going to tell you something I wish someone would have told me: Don't pay money to chase appreciation. In fact, if you've read some of the trade continuations I've done lately you will see that I've gotten paid to participate in an issues appreciation. If I can't get paid to capture appreciation I will look to get paid to roll out the next expiration or two at the same strike price. This will bring in income and lower the amount I have invested. If the stock has appreciated so much that neither of these are viable I'll either let the shares be assigned or I'll close the position myself.

In other words, I'll only sell an option for a credit. If that can't be done in a way that's worthwhile then that's when I sell a stock. It should be noted that I only invest in stocks I would want to hold long term, i.e., Dividend Champions, Aristocrats or Contenders, all with rising dividends or precious metal ETFs which I believe are in a long term secular bull market.