MM37 - Freeing up Cash in a Retirement Account

This is a very important Market Minute today. And you have never heard me speak about this in any of these prior.

Let me set the scene. You own 4 Tesla December 2026 $100 calls. Tesla is trading at $400. They are deep in the money and trading at almost 100% intrinsic value, meaning there is very little extrinsic left. The intrinsic value is the portion of your option that is in the money. It is the real value of your option.

Now let me ask you something. You see three other opportunities you want to take. Your money is all tied up. What could you do to free up cash without sacrificing your Tesla trade for the next 7 months?

Here is what we know. The seasonality for Tesla is strong from April earnings through the end of the year. So this is the worst time to hobble your horse. This is the worst time to say, you know what, let me get rid of one of the horse's legs. It could run on three. We do not want to do that.

How can we still have all of the upside and free up some money? It is called a vertical roll.

What Is a Vertical Roll?