Setup
HIMS remains under Wheel management following assignment from the previously sold $33 Cash-Secured Put.
The position has now spent roughly 27 days without a Covered Call, and that inactivity was deliberate.
After assignment, HIMS moved below both the original $33 assignment price and the level where available Covered Call strikes provided acceptable exit quality, so waiting for recovery was preferable to forcing premium collection.
Shares have now moved back into the low-$32s with a strong green day, while implied volatility remains elevated, finally creating a useful Covered Call setup.
Structure
Covered Call sold at the $35 strike.
The strike sits $2 above the original $33 assignment price and well above the $30.83 effective cost basis accumulated through the Wheel cycle before this call.
With HIMS trading around $32.63 at entry, the $35 strike leaves approximately 7.3% additional upside before call-away while still generating $340 across the 400-share position.
Assignment Logic
The shares are already owned at a $33 assignment price.
If HIMS remains below $35 at expiration, the Covered Call expires worthless, the $340 premium is retained, and the effective cost basis falls from $30.83 to approximately $29.98.
If HIMS closes above $35 and the shares are called away, all 400 shares exit at $35, producing a $2 per-share stock gain relative to the original assignment price, or roughly $800 across the position.
Call-away at $35 is therefore a fully acceptable outcome because the strike sits above assignment basis while also releasing approximately $14,000 of capital.
Premium Context
Premium is elevated.
The August 28 $35 call provides $0.85 per share with eight days until expiration.
The premium reflects:
- elevated implied volatility
- strong recent recovery
- eight-day expiration
- approximately 7% distance to the strike
Using the $35 strike value of the covered shares as the capital reference, the premium represents about 2.43% over eight calendar days, or roughly 111% simple annualized APR.
The premium is attractive, but the reason for the trade is not the APR; the reason is that the $35 strike now allows the recovery to be monetized without giving up the shares too cheaply.
Trade Structure
Management Plan
This Covered Call resumes active premium collection after approximately 27 days without a call on the HIMS position.
If HIMS remains below $35 through expiration, the call expires worthless, another $340 is added to the premium accumulated during the cycle, and the shares remain available for another Covered Call.
If HIMS rallies above $35 and the shares are called away, that exit is acceptable because the strike sits above the original $33 assignment price and well above the effective cost basis of the complete position.
There is therefore no reason to roll simply to prevent assignment.
If the market takes the shares at $35, the Wheel closes with both premium income and an additional $800 stock gain above assignment basis.
Process Note
This position spent almost a month without a Covered Call, and that does not mean the Wheel stopped working; it means the available trades were not good enough.
The objective was never to generate premium every week regardless of price, but to wait until the stock recovered enough that a Covered Call could improve the position without creating an unattractive exit.
That point has now arrived, and the choice of $35 instead of the richer $34 strike preserves a better balance between current premium and future upside participation.
