In brief, on 15 Jan 2016, I bought USO underlying stock 100 units @ $8.805 and I subsequently sold USO Call Options (detail in the screenshot) @ $0.33.
Fast forward to today, 17 Feb 2016 (after 1 month from the trade entry), the stock price is trading at $8.47. Now, let's look at the position un-realized P&L.
If you are observant, you should have noticed that my USO Call Options is going to expire in 2 Days and it is now trading at $0.015.
What I intend to do now is to close this position and open a new positions with longer duration to capture more premium. This will subsequently reduce my cost base in USO.
Alright, this is what I have just done! I hit and sell at bid price @ $0.42 (lazy to wait much longer as I am blogging this, in normal circumstances, I would sell at mid price and wait for the market to fill my order).
With this adjustment, my USO cost base now is $8.075 ($8.805 - $0.33 + $0.02 buy back - $0.42).
I will update the position again :). Have a nice day!
Disclaimer: This is just for educational purpose only and not a recommendation.