Should I Close My Trade Early?
Compare hold vs close scenarios for your covered call or cash-secured put. See what's left to make, visualize your progress, and get a data-driven recommendation.
How This Calculator Works
The Exit Analysis Calculator compares your potential outcomes across different closing scenarios. It calculates your “left to make” — the difference between your max profit if held to expiration and what you'd net by closing right now.
Why Closing Early Sometimes Beats Holding
For covered calls, if the stock runs well above your strike, your stock gains exceed the cap. Closing everything captures those gains. The calculator detects this automatically and flags when closing nets you more than holding.
Premium Velocity
Consider the rate you earn income, not just the amount. Squeezing out the last 15% of premium over 14 days earns far less per day than deploying that capital into a fresh 30-day position at 100% premium. This “premium velocity” concept is why many traders close at 50-80% of max profit and roll into a new trade.
Intrinsic vs Time Value
The option price has two components: intrinsic value (the real, exercisable portion) and time value (what theta eats away each day). As an option seller, you profit when time value goes to zero. The calculator breaks this down so you can see exactly how much time value remains.
Three Covered Call Scenarios
Hold to expiration: Max profit = premium + capital gain (shares called away at strike). Close everything: Buy back the call and sell shares at market price — sometimes better if stock ran past strike. Close call, keep shares: Pay to remove the upside cap and let shares ride higher.
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Frequently Asked Questions
When should I close a covered call early?
Consider closing when you've captured 70-85% of max premium, especially if you can redeploy the capital into a new position. Also close when the stock has run so far past your strike that closing beats holding — our calculator shows you exactly when that's the case.
What does 'left to make' mean?
It's the dollar difference between your maximum profit (if held to expiration) and what you'd net by closing right now. If $50 is left to make, that's what you'd gain by holding vs closing.
Why would closing early ever make MORE than holding?
For covered calls, if the stock runs significantly above your strike, the stock gains you capture by selling shares at market price can exceed what you'd get if capped at the strike price. The calculator checks for this automatically.
What is premium velocity?
The rate at which you earn premium per day. Sometimes closing at 80% profit and opening a new trade generates more total income than waiting 2 weeks for the last 20%. Our verdict factors this in.
Should I close my cash-secured put early?
If you've captured 80%+ of premium, closing and selling a new put is often more efficient. If the stock is dropping toward your strike, the decision depends on whether you want to own the shares.
What's the difference between intrinsic and time value?
Intrinsic value is the real exercisable value (how far ITM the option is). Time value is the remaining premium that theta erodes each day. As an option seller, time value working to zero is how you profit.
Options involve risk and are not suitable for all investors. All calculations are estimates — actual results will vary. Not financial advice. Full disclosure