u/LabDaddy59

https://preview.redd.it/0h272llp2pth1.png?width=952&format=png&auto=webp&s=db4b02048384f4c6548ea85b799cc7070c0693ce

• $7,970 collected.
• Still have CRWV to write. Based on experience, that could be around $2k.
• May do one more buy/write, as the at-risk amount is just below $700k. Does anyone want me to do a particular stock they're interested in? Keep it below ~$600 max price.
• No premiums received for LITE or SOXL, as they remain outstanding from last week.
• If you're curious why the stock listing order has changed, I segregated the stocks by which account I have them in. CBRS and LITE are in my original Roth, SOXL is in a traditional IRA, and the rest are in the Roth dedicated to the campaign.

Good luck and have fun!

https://preview.redd.it/z0mtlmmj5hth1.png?width=976&format=png&auto=webp&s=a9fb614c161fed17125ef536ed4eddbac8cbe121

Boy, this week was a bit of a mess...

Two reasons. First, as noted earlier, I was considering dumping a few stocks that were slow to recover from their Jul/Aug dip. Second, as also noted before, I'm setting this campaign up in a dedicated Roth account.

IRA — a holdover:

• SOXL: This ticker was a bit of an experiment, and I need to decide what to do with it for the campaign, since it is in an IRA and I'd really prefer everything in the one dedicated Roth. I can move it, but that would have tax ramifications as a Roth conversion. I could just shut it down as I did for many in the old Roth. What I'm currently leaning toward, although not 'pure', would be to simultaneously shut this trade down and open it in the new Roth, which I should be able to do for a minimal cost, and just shrug.

Old Roth — all holdovers:

• AAOI, APLD, COHR: By purposely setting a weak strike, was able to get these called away. Due to this, the combined net campaign +/- for these three were a negative $8,719 for the week.
• CBRS: try as I might, it didn't get called away. Even rolled down during the week.
• LITE: I've been having a little fun following this up, with a current strike of $950 expiring Oct 16, and the stock closing at $1,085.42. Down $10,580 for the week due to the closing, at a loss, of a prior short call (~$7k) combined with a further deterioration of the current short call. Not terribly concerned, as the current short call would generate $13k if assigned.

New Roth — holdovers:

• CRWV: the only one in this category not to get called away, but this, along with SOXL, I'm fine with.
• MRVL, NBIS, ORCL, and VRT: all called away, net negative campaign impact of $2,581.

New Roth — new trades:

• INTC, PLTR, and SPCX: all called away, net negative campaign impact of $1,288 due to SPCX.

So a bit of a hurt this week in terms of campaign versus buy-and-hold, but at the end of the week, I was still up $11k or 1.5% on the amount at risk. This brings the campaign to a YTD profit of 45.1% on original capital.

So, all told, I have four tickers still in inventory: CRWV (new Roth), CBRS and LITE (old Roth), and SOXL (IRA). I'll get there...

Notice!

Over the next few weeks, I may do anything from reducing exposure from the routine value in the $700k-$750k range to liquidating all positions. I'm a bit concerned about the AI sector [edit: in the short term; still bullish in the longer term] and the midterm elections. In addition, I'd be more than happy to end the year at the current 45% YTD gain.

Stay posted, good luck, and have fun!

Nor do delta, vega, or rho.

I see this kind of stuff routinely, but it's just wrong.

The Greeks are descriptive, not determinative.

The BSM options pricing model has only four drivers of price movement:

• Stock price movement
• Time elapsing
• Risk-free interest rate movement
• Volatility changes

That's it.

So my advice is: when you read someone saying, "Gamma is driving the option's price" or something like that, ignore the post and block the individual, because they've shown a lack of understanding of the BSM model and its related Greeks.

https://preview.redd.it/byaoex5a9jsh1.png?width=971&format=png&auto=webp&s=d1da5565764923fd72ed54cb171f89c33702dbee

Total premium received: $10,126.

AXTI and BE were assigned last week; I picked up the following this week to replace them.

• INTC - 200 shares
• PLTR - 200 shares
• SPCX - 300 shares

https://preview.redd.it/b4zyq0f8h8sh1.png?width=882&format=png&auto=webp&s=0dd9efb031ac6a05e235ccde3a251f6bc1b1a126

A bit of a crazy week.

1. AAOI, APLD, COHR, and ORCL declined between 3.6% and 7.7%
2. AXTI and SOXL rocketed up 12.7% and 22.5%, respectively
3. BE, CRWV, MRVL, and NBIS were up between 6.2% and 8.7%.

I let AXTI get called away and defensively rolled SOXL. Those were my two worst performers, down 9.7% and 15.5%, respectively, from buy-and-hold.

BE worked out okay, as it was called away, and I did have a very small benefit over buy-and-hold.

Last week, I mentioned how especially volatile CRWV is, as it had dropped almost 9% ($15,260). This week, it was up 7.7% ($12,640).

AXTI and SOXL, though, weighed the portfolio down, as I was $5,443 (0.8%) worse off than buy-and-hold.

For the week, I was up 3.9% on initial capital, bringing the year-to-date to 43.3%. I'm good with that - 43.3% over 39 weeks is just over an average of 1% per week.

[Edit: I'm adding a "Approx Annualized" percentage, as the strategy started late in the first quarter and didn't get up to full speed until March. Accordingly, I've lopped off 8 weeks as an estimate in the calculation. In other words, the "Approx Annualized" = the YTD % divided by (number of weeks less 8) times 52.]

TL;DR: Oura’s IPO appears to be a vehicle for venture capital exit, not raising funds for growth. The customer base skews narrow, and the subscription model faces free competition from Samsung, Garmin, and potentially Apple/Google/Amazon. This whole setup reminds me of Peloton before the bottom fell out.

 -----------------------------------------------------------------------------------------------------------

Oura is slated for an IPO the week of September 28, 2026. I've been digging through their S-1 and the more I look, the more this reads like a liquidity event for VCs wearing an IPO’s clothing.

Start with the share count. Oura itself is selling 13.5 million shares. Existing shareholders, mostly the VC firms, are selling 36.5 million. So for every share the company issues to fund itself, insiders are selling almost three. That's not a company raising growth capital, that's a company backing a moving truck up to the vault for the people who got in early.

And here's the part that actually got me: of the ~$532.6M Oura nets from its own share sale (at the $42/share midpoint), about $526.4M of that is earmarked to cover the tax bill on RSUs that vest because of the IPO. That leaves roughly $6M for "general corporate purposes" – out of a ~$2.1 billion offer. The company isn't raising money to build anything or increase R&D, it's raising just enough money to pay its own insiders' tax bills for going public. The actual growth capital raise is close to zero.

Then there's the customer base, which makes me wonder how durable the current growth is:

• Gender:
  • 72% female
  • 28% male
• Age:
  • 31% under 30
  • 42% ages 30-45
  • 27% ages 46+
• Household income:
  • 37% under $100k
  • 31% $100k-$200k
  • 32% over $200k

That's a narrower demographic than the "wearables for everyone" pitch suggests.

Then, there is the subscription. Oura charges $69.99/year or $5.99/month on top of the ring itself, and it's a real chunk of the business (subscriptions are ~20% of revenue at 89% gross margin, so Wall Street will love that line item). But most competitors don't charge a subscription at all. Samsung already has a ring on the market and a Galaxy Ring 2 is expected in early 2027. Garmin has a smart ring (Cirqa) working through certification right now. And Apple, Google, or Amazon could walk into this category whenever they want and undercut the subscription entirely - they don't need the recurring ring revenue the way Oura does, they want the health data.

I’m reminded of Peloton. When Peloton went public, I wanted so badly to buy puts, but the real problem was never "will this go wrong", it was "how long until the bottom falls out." Hardware-plus-subscription darlings can trade at a premium for a long time before the growth story cracks, and shorting (or buying puts on) that kind of stock risks being right about the destination but wrong about the timing, which is its own way to lose money. What's wild is that Oura's own S-1 apparently name-checks Peloton as the risk case for this exact business model, so even the company seems to know what the bear case looks like.

None of this means Oura is a bad product as the ring itself has a great reputation. But as an IPO, this looks like VC cashing out, a token primary raise that mostly pays internal tax bills, a subscription model facing free competition from three trillion-dollar companies, and a customer base narrower than their marketing suggests.

 

Sorry for the delay, things have been hectic (all good, just hectic!) both in the market and personally.

So I'm just dropping the spreadsheet without my usual level of commentary for completeness. All I'll say is that last Mon the market dropped, Tue sold calls, then spent the rest of the week defensively rolling due to the partial recovery. That explains the substantial recognized loss this week on short calls. The flip side is that the short call current liabilities (~$31k) have substantial time value.

Last, CRWV dumped almost 9% on the announcement that it would launch a $3.5 billion convertible note offering plus a 35 million share at-the-market equity program. My personal feeling is that CRWV isn't a great buy-and-hold (unless your timeframe is 5 to 10 years or more), but it's great to trade covered calls or short puts against.

https://preview.redd.it/08kjrhirpyqh1.png?width=1013&format=png&auto=webp&s=08b2c7f70d1c27263197c6f1efbef4e744c3c02b

Another interesting week.

Tuesday, everything was up a healthy amount, then it all faded away.

Buy & Hold

Overall, buy & hold declined $5,187 (-0.7%), but there were some decent winners (COHR (8.3%), LITE (5.2%), MRVL (5.6%)) among some losers (AXTI (-4.7%), CBRS (-5.2%), ORCL (-8.6%), and VRT (-8.4%).

Premiums

Since there were no options ITM, there was no issue with capped gains, and the campaign benefited from the full premiums of $18,535 (2.5%).

Two comments on premiums:

1. Earlier in the week, I mentioned that I sold a Wed expiration of SOXL on Tue; on Wed I rolled to a Fri expiration. That worked well and earned $2.2k.
2. LITE rocketed up to north of $985 on Tue. With my basis ~$925, I decided to sell a $985 call. With the drop that then occurred today, when it was still north of $935, I rolled it down to a $935. LITE closed at $927. Total premium earned of $4.3k.

Net

For the week, the net campaign was up $13,348, or 1.8% on the initial amount at risk (S&P 500: -0.8%).

On a YTD basis, the campaign is up $277,192, or 43.4% on its initial capital contribution (S&P 500: 11.9%).

https://preview.redd.it/52k6li7wjyoh1.png?width=1014&format=png&auto=webp&s=0ebb22776687833eb6577d610efbc9a0d850eb17

With the assignment of AXTI and SNDK last week, capital was freed up to be redeployed.

Purchases:

• AXTI: 700 shares @ $67.97
• BE: 200 shares @ $280.60
• CBRS: 200 shares @ $202.50
• ORCL: 300 shares @ $164.50

Short Calls:

Collected premiums amounting to 2.3% of the at-risk amount. I'm pleased with that, given I haven't sold calls on six of the thirteen tickers. Still contemplating the path forward for those six: AAOI, APLD, COHR, MRVL, NBIS, and VRT.

For grins and giggles, I took advantage of SOXL's MWF expirations by selling one with a Wednesday expiration, so I may sell another for the Friday expiration.

https://preview.redd.it/59v4dpsqrdoh1.png?width=981&format=png&auto=webp&s=712c567d805aadb6c191576559569a668015d1ce

You'll occasionally hear someone claim that "boring is better," referring to trading low- to modest-volatility stocks and how they're less prone to significant drawdowns.

But no.

Boring isn't better.

Boring is boring.

Exciting isn't better either.

Exciting is exciting.

Humans are a narrative species, and we are supremely adept at two things: 1) ex post facto rationalizations and 2) attempting to turn our weaknesses into a strength as opposed to acknowledging the weakness and improving. What folks say reveals their limits.

It's like the people who say that selling options is better than buying options. No, it's not. Saying so is an admission by folks who could never quite figure out how to buy options profitably. They're limited to selling options, as that's what they've been most successful with; it's what they know best. They may be the types who advise rolling your short position ATM, when that is the worst time to do so, from a premium-earning perspective.

Or the people who, when comparing their returns to the S&P, claim that the historical S&P return is around 10%. That may be true, but the 10% rate is for something like a 50-year period. Excuse me? If the S&P is up 18.5% in the past five years, and you're using your five-year return, why are you using a 50-year metric for comparison purposes? Oh, that's right, because you've underperformed the five-year metric, so you want to look better.

So "boring is better" is a diplomatic way of saying, "I could never figure out how to profitably trade volatile stocks." If they figured it out, they'd realize that it, too, is 'boring'.

Interesting week.

Overall, a good week, gaining $41.8k or 5.6% on the at-risk amount. The campaign is up 41.4% YTD (S&P 500: 12.8%).

Four major things.

1. SNDK: Got hammered. My ATM call of $1507.50 got demolished as SNDK rose 17.2% this week, 11.9% on Friday alone, to close at $1,740. One of the rare times premiums aren't covering the capped gain, and by a lot! Having said that, as small comfort, I did collect/earn $10.3k in two weeks on a $150.6k investment (6.8%, and no, I won't report an annualized number 😉).
2. AXTI: My strike was $64, and it closed at $61.64. After hours, the most I see is $63.90. Yet I woke up this morning to find they were assigned. /shrug
3. CRWV: up $10.3k (6.1%) to $89.36; my strike was $90.
4. SOXL: up $2.4k (5.3%) to $117.28; my strike was $118.

https://preview.redd.it/8asc2wvgeqnh1.png?width=1064&format=png&auto=webp&s=331e7ceaeb4cbed87165e355f60fa47d53fcbbfc

Commentary:

I started breaking out the recovery from the July downturn on the premise that the stocks may bounce back. After 5 weeks, that thesis is pronounced dead, so I'll probably go back to selling ATM.

This may well result in recording realized losses if the stock is called away, as happened this week with AXTI. If you've read enough of my stuff, you'll know this isn't a concern for me since I'm using M2M (mark-to-market).

I can't stress enough: use M2M and don't get into the mindset of not having recognized losses. Some folks will say you're failing or picking bad stocks if you have a number of recognized losses. This is a naive viewpoint. To paraphrase Mario Andretti, "If I'm not having occasional losses, I'm not taking enough risk."* I say something similar with stocks getting called away: "If my shares aren't getting called away, I'm not taking enough risk."

* Andretti, a former Formula 1 and Indy Car race car driver, once said, paraphrasing, "If you feel that everything is under control, you're not driving fast enough."

https://preview.redd.it/kusdky01xvmh1.png?width=950&format=png&auto=webp&s=deefcc737fe77a4a84fe37aec460c83cf0b6fa9e

A few to start the week. I may sell more tomorrow.

Ho hum. Tough making money these days.

NVDA released earnings, did well on its own, and some of my holdings briefly bounced, but they ended up retreating. I suspected LITE and SNDK would be called away, but they weren't.

LITE's strike was $925, and it closed at $895.
SNDK's strike was $1,505, and it closed at $1,485.

While I would have preferred them to be called away, they are at least currently in range of providing a good premium next week.

https://preview.redd.it/xupr01hw2lmh1.png?width=1013&format=png&auto=webp&s=695ffec9fcd31295040a6ccfbbfd36f4a4fe54c7

LITE popped 5% today, above my cost (cost: $923.63; spot: $931.81). Sold a call expiring Fri Aug 28 with a $925 strike, collecting $2,724 in premium.

It'd be nice to have one called away!

So I'm playing it very cautiously this week. NVDA has an earnings report on Wed, Aug 26, and I think some of my holdings may get a sympathetic bounce, so I haven't sold any new calls against existing holdings (I entered the week with one open: AXTI, valued at about ($385).

Given the reduction in my capital at risk due to the recent drawdowns, I once again "topped up", this time by entering a 5 DTE ATM Buy/Write for SNDK.

I bought 100 shares at $1,506 and sold a $1,505 call expiring Fri, Aug 28, for a premium of $5,887 (3.9%).

Why this is important:

1. Using M2M, you understand that a stock that dropped from $100,000 to $90,000 has reduced your capital deployed, so if you want to maintain a certain level ($100,000) of equity invested, you need to invest ($10,000) more. There is an economically unhealthy mentality out there to not realize a loss (I'll be writing a separate post on this topic shortly). It's an ego thing ("I didn't have any losses!", "If you have so many losses you must be doing something wrong!"). Losses are part of trading: get over it and move on.
2. Keep a good amount of cash on hand! Even scaling this to a portfolio your own size, many people wouldn't have kept $105,600 on hand, which would keep them from making this additional investment.

"So, LD, what will you do when the stocks in your portfolio gain value, and you're up to, say, $850k or $900k?" (target was ~$750k)

Easy. I'll sell some off for cash. You may remember I've taken a few actions during this downturn. First, I doubled my AXTI exposure from 700 shares to 1,400 shares, reducing my average cost basis from $134 to $95. Second, I sold IONQ and doubled my CRWV holdings (from 1,000 shares to 2,000 shares). Third, I've now bought SNDK. It will be easy to unwind some of these positions when the market recovers.

Miscellaneous:

This has been quite a journey. As you may know, I'm running this campaign in a Roth account where I do other trading. It wouldn't be too cumbersome to pull out the campaign's numbers if I wasn't actively trading the same stocks outside the campaign but still in the same Roth account, but I am.

Therefore, I've been considering utilizing a separate Roth account just for the campaign. It'll make my life easier on several fronts. If I do this (highly likely), I may (fairly likely) revise the weekly results reporting.

I'll keep you posted!

As always, good luck and have fun!

-LD

[Edit: thanks to u/ThetaGang44 for bringing SNDK to the forefront of my mind.]

I don't have any long positions in NVDA, though I'm considering including it in my buy/write campaign.

That said, I think NVDA will deliver a solid earnings beat and decent guidance. This may not energize NVDA's stock much, but I can see it signaling a significant sympathetic bounce in some of these other AI plays.

Thoughts?

u/pagalvin has written about their 1%/ITM approach to selling covered calls, and as you may be familiar, I'm doing (well, ahem, was doing) ATM strikes.

I'd be very curious/interested in the longer-term results of each.

So, u/pagalvin, no pressure, but it'd be neat if you posted weekly updates similar to mine.

The thing I'm keen on is the balance between premium and downside protection.

For example, I could open a $215 strike Aug 28 short call on NVDA, get a 3% return, and, accordingly, have 3% downside protection.

Pagalvin's approach would yield a 1.3% premium on a $205 strike, providing 5.8% downside protection; a $200 strike would yield a 0.7% premium and provide 7.6% downside protection.

Part of the dilemma in the evaluation is this: weeks can go by without needing 5% protection (~$10.75 at spot), so during those weeks you could be building a "bank" of premiums to help offset any future potential downside. That bank could easily exceed the 5% protection level.

I'd also be interested in that type of comparison (ATM v 1% return) for different stocks.

Thoughts?

https://preview.redd.it/51i34ifsl5lh1.png?width=1003&format=png&auto=webp&s=4b669662c34395b85250df7ed07bd286eed140d3

In the "looking at the bright side of things":

• The 3 weeks of recovery have seen the stocks recover a little more than 33%.
• Total P&L is still a respectable $261k year-to-date.

Best positioned stock: LITE at 6% down.
Worst positioned stock: APLD at 43% down.

As mentioned last week, I'm on the bubble, deciding whether to bail on APLD.

NVDA reports earnings next week, so we'll see what happens!

How do you manage defensive rolls?

STO calls for $100
Net credit of $100

BTC for $200
STO for $225
Net credit of $25

BTC for $350
STO for $400
Net credit of $50

If you BTC at $200, your net is

$100 credit
$25 credit
$50 credit
$200 debit
Net: $25 debit (loss)

In other words, a rule to close at 50% doesn't take into account cumulative losses, so by closing at 50% profit on your current trade, you may still be losing money over the lifecycle of the trade.

The "take profits at 50% of the premium" works for an initial trade, but if you have a series of defensive rolls, you may end up with a net loss, so how do you manage the situation? I can imagine it can get a lot worse if you've been rolling defensively for a while.