Showing posts with label #OptionsSeller. Show all posts
Showing posts with label #OptionsSeller. Show all posts

Sunday, May 17, 2026

The Closing Bell Countdown: Managing My May 22 Expirations

 Let’s talk about the reality of trading options in the final stretch. It’s Sunday night, and we are officially entering expiration week for the May 22 cycle. For a premium seller, this is where the real work happens. The theoretical Greeks drop away, implied volatility crumbles, and we face the sharp reality of gamma risk and spot prices.

Right now, my dashboard is looking solid—sitting on green across the board—but if you’ve been on the desk long enough, you know that unrealized gains can vanish before the opening bell on Tuesday if you get complacent.

I’m currently managing five short positions across three wildly different vehicles: a hyper-growth retail battlefield (RDDT), a highly speculative momentum play (ASTS), and a defensive mega-cap anchor (UNH). Let’s break down the tape, analyze the math, and map out exactly how I plan to handle these contracts as the clock ticks down.


The Open Position Ledger

Here is exactly where my capital is tied up heading into Monday morning:

Underlying TickerStrategyStrike PriceCurrent PriceMy Cost BasisStatusCurrent Profit
UNHCovered Call$400.00$393.85$395.71OTM+$546.00
RDDTCash-Secured Put$147.00$158.17N/ASafe OTM+$187.00
RDDTCash-Secured Put$157.50$158.17N/AATM / Risk+$322.00
RDDTCovered Call$187.50$158.17$182.90Deep OTM+$51.00
ASTSCovered Call$89.00$83.67$79.13OTM+$181.00

Managing the Reddit (RDDT) Sandbox

Reddit is a pure implied volatility (IV) play for me. The stock has structurally elevated premium because the retail herd loves it, and the market keeps pricing in massive implied moves. With the underlying spot price closing around $158.17, I’ve constructed a multi-legged premium income structure across different strikes, and it's giving me three very different looks.

1. The RDDT $157.50 Cash-Secured Put: My Primary Tactical Risk

Look at the dashboard layout—this contract is firmly in the ATM / Risk bucket. Even though the spot price ($158.17) closed technically sixty-seven cents above our strike, this alert means the stock dipped below $157.50 during late or intraday trading, exposing the position to high delta sensitivity.

               [ Put Strike: $157.50 ]     [ Current Spot: $158.17 ]
                          |                           |
  Bearish / Assignment < - - - - - - - - - - - - - - > Bullish / Expires Worthless

When you are short a put this close to the pin during expiration week, Gamma is your enemy. A minor 1% downward gap on Monday morning will pump the premium value of this contract instantly, swallowing up my +$322.00 unrealized gain.

  • The Game Plan: I am not letting a winner turn into a loser here. If RDDT shows any weakness at the open, I will Buy to Close (BTC) to lock in the bulk of the profit, or roll the contract out to June to capture more extrinsic value at a safer strike.

2. The RDDT $147.00 Put & $187.50 Covered Call: The OTM Cushions

The other two legs of my Reddit setup are behaving exactly as intended. The $147.00 put sits roughly 7% below current spot, and the $187.50 covered call is a massive 18% above the market.

With my equity cost basis on that covered call sitting at $182.90, I’m fully protected. The $187.50 call is only holding $51.00 of remaining value. Theta has extracted almost everything it can.

  • The Game Plan: The $147.00 put has generated a clean +$187.00. Barring an absolute macro meltdown, both of these are on autopilot to expire worthless on Friday. I'll leave them alone and let theta cross the finish line.


Trading the Extremes: AST SpaceMobile vs. UnitedHealth

The rest of the capital is distributed between a high-beta momentum engine and a low-beta blue chip. This is how you balance a book.

ASTS $89.00 Covered Call: Staring Down a Retail Rally

AST SpaceMobile has been an absolute retail favorite lately due to recent joint venture news. It closed the week at $83.67. My cost basis on the underlying shares is $79.13, meaning I am already sitting in a profitable equity position alongside the +$181.00 options premium gain.

  [ Current Price: $83.67 ] ------------> $5.33 Gap ------------> [ Call Strike: $89.00 ]

A $5.33 cushion might look safe on a boring stock, but on a ticker like ASTS where IV regularly clears triple digits, that gap can evaporate in a single pre-market session. If the stock tests $85.00 early in the week, the delta on this option will skyrocket.

  • The Game Plan: If it blows past $89.00, I'll happily let my shares get called away, locking in max profit on both the stock appreciation (from $79.13 to $89.00) and the full option premium. If momentum stalls, I'll buy to close early to capture the premium win.

UNH $400.00 Covered Call: The Institutional Anchor

On the flip side, UnitedHealth Group at $393.85 is a textbook defensive trade. The short $400.00 call is sitting at a beautiful +$546.00 profit. My underlying share cost basis is $395.71, so if the stock stays right here, I capture both the massive premium drop and a minor equity scratch.

UNH doesn't move like a tech stock; it’s an institutional giant with predictable price action. Sitting 1.5% out of the money with five days left means the remaining extrinsic value is decaying rapidly.

  • The Game Plan: Unless healthcare headlines disrupt the entire sector this week, I'm holding this position to let the remaining premium dissolve into zero.


Pro Rules for Expiration Week

If you are writing premium, you need to live by a strict set of rules when Monday of expiration week rolls around. Here is the framework I use to execute:

  • Never Let Gamma Dictate Your Loss: Near-the-money options carry explosive gamma. If a position like my RDDT $157.50 put moves against me, I don't "hope for a bounce." I manage the risk immediately by buying it back or rolling out in time.

  • Take the 80% Win: If an option has given you 80% to 90% of its max profit early in the week, it is usually smart to pay a few bucks to close it out. Don't risk 100% of your collateral just to chase the last few dollars of premium.

  • Know Your Assignment Goals: If you don't want to own 100 shares of the underlying stock at the strike price, do not hold a short put into Friday afternoon. Pin risk is real, and after-hours movements can force an assignment you weren't prepared for.

Final Word from the Desk

We’ve got a highly profitable setup on the table for this week, but execution is everything. The goal for the next 5 trading days isn't to find new trades—it’s to defend the cash we’ve already lined up. Watch the tape, monitor the delta changes on RDDT and ASTS, and let the clock do the rest of the heavy lifting. Stay disciplined.

Wednesday, January 29, 2025

Riding the NVIDIA Wave: Options Play

 Today, I'm excited to share a recent win from my options trading playbook. Buckle up as we dive into a day trade that turned out to be quite the rollercoaster ride!

The Setup

On January 24, 2025, I had my eyes set on NVIDIA (NVDA), a stock that's been making waves in the tech world. With AI advancements and chip demand soaring, NVDA has been a hot ticket. I decided to play this momentum with a deep in-the-money call option.Here's the nitty-gritty:
  • Option: NVDA $200 Call
  • Expiration: January 16, 2026
  • Contracts: 1

The Play

9:57 AM ET: Sold 1 contract at $1,438.00
2:10 PM ET: Bought back 1 contract at $1,240.00

The Result

Profit: $198.00
Return on Investment: 15.97%That's right, folks! A cool 15.97% return in just over 4 hours. Not too shabby for a day's work, eh?

Breaking It Down

Now, you might be wondering, "How did you pull this off?" Well, let me spill the beans:
  1. Market Timing: I sold the option early in the trading day when optimism was high.
  2. Patience: Instead of panicking, I waited for the right moment to buy back.
  3. Deep In-The-Money: These options are less volatile, providing some cushion.

The Takeaways

While this trade worked out well, it's crucial to remember a few things:
  1. High Stakes: We're talking about options priced over $1,200 each. That's not chump change!
  2. Risk Management: Always have an exit strategy. I was prepared for the trade to go south.
  3. Market Knowledge: Understanding NVIDIA's position in the tech landscape was key.

Final Thoughts

This trade is a testament to the potential of options trading when done with careful planning and execution. However, remember that with great potential comes great risk. Always do your homework, never risk more than you can afford to lose, and stay humble – the market has a way of teaching even the most seasoned traders new lessons.So, what do you think? Have you had similar experiences with options trading? Any NVIDIA fans out there with insights to share? Drop your thoughts in the comments below!Until next time, happy trading and may your charts always be green! 📈🚀

Tuesday, November 12, 2024

Capturing Premiums with a Rolling Options Strategy: A Deep Dive into October-November 2024 Trades

 In October and November 2024, I implemented a rolling options strategy to maximize my income through premium collection while managing potential risks. Below, I’ll walk through each trade, including the rationale behind rolling, capturing premium, and other key insights from this options strategy.


Trade Summary

Throughout these two months, I executed a series of call and put options on several stocks, notably SMCI, VZ, T, and HOOD. My approach focused on selling options to collect premiums, rolling contracts to adjust risk and capture additional premium, and letting some contracts expire worthless to secure gains. Here’s a detailed breakdown of each trade.

1. SMCI PUT Options: Active Rolling Strategy

The SMCI options played a significant role in this strategy, with a continuous series of puts rolled to optimize outcomes. Here’s a closer look:

  • 10/10/2024: Started by selling an SMCI $40 PUT, expiring on 10/25, for a premium of $81. Rolled to a $40.5 PUT expiring 11/1 for more strategic positioning.
  • 10/11/2024: Sold SMCI $40.5 PUT (11/1) for $55, then rolled it to a $44 PUT expiring 11/8 for added premium.
  • 10/14/2024 - 10/16/2024: Continued with a series of SMCI PUT rolls, ultimately landing at a $46 PUT with expiration extended to 11/29, capturing additional premiums along the way.

Outcome: This series of SMCI PUTs exemplifies the benefits of rolling—capturing incremental premium, extending time frames, and increasing the strike price to align with my market outlook.

2. T and VZ CALL Options: Capitalizing on Premium from Expiration

  • T $23 CALL (10/25, 11/8 Expiries): Both of these options expired worthless, allowing me to keep the entire premium.
  • VZ Calls: The $46 CALL (10/25) and $42.5 CALL (11/8) also expired worthless, again yielding full premium capture.

Outcome: The T and VZ calls were well-positioned above current market levels, giving a low probability of assignment and allowing me to retain all premiums without needing to roll or close out early.

3. HOOD PUT Options: Selling for Steady Premiums

  • 10/29/2024: Sold a HOOD $25 PUT expiring 11/28 for $65, which eventually expired worthless.
  • 11/11/2024: Sold a HOOD $31.5 PUT expiring 11/22 for $63. This position was part of a straightforward premium collection strategy.

Outcome: The HOOD PUT options provided consistent premium income without needing to roll. These contracts were placed with comfortable strike prices, leading to expiration without any additional management required.

4. VZ $41 and T $23 CALLS (Expiring 11/15 and 11/22)

  • 11/11/2024: Sold a VZ $41 CALL (11/15) for $15 and a T $23 CALL (11/22) for $8, both designed for potential premium capture with minimal risk of being called away.

Outcome: These were smaller plays in the larger strategy, offering steady premium income with low assignment risk.


Key Takeaways from My October-November Options Strategy

  1. Rolling as a Premium-Enhancement Tool: Rolling allowed me to maximize income from the SMCI PUT options. By adjusting strike prices and expiration dates, I could manage risk while enhancing premium collection.

  2. Capitalizing on Expiring Options: A significant portion of these options expired worthless, which is ideal in an options-selling strategy. The T, VZ, and HOOD options were positioned carefully to expire out-of-the-money, enabling me to keep 100% of the premium.

  3. Managing Risk with Strategic Strike Adjustments: With some positions, I gradually increased the strike price, especially with SMCI. This maneuver allowed me to remain in the trade for longer, capture more premium, and maintain a favorable risk profile.

  4. Consistent Premium Income: This strategy generated consistent cash flow, contributing to the overall growth of my portfolio. The cumulative premiums from these options reinforced the value of a disciplined selling and rolling strategy.


Final Thoughts

The October-November period demonstrated how a structured options-selling strategy can yield steady returns, even with volatile underlying assets. By strategically rolling SMCI PUTs and allowing other options to expire worthless, I maximized my income and managed downside risks effectively.

If you’re exploring options selling, consider incorporating rolling and expiring strategies like these to capture premiums consistently. Remember, always assess the risk tolerance, monitor market movements, and adjust positions as necessary to optimize your portfolio.

Translate