Setup
ONDS shares were previously assigned at the $11 strike, leaving 1,500 shares in the Wheel position.
Premium collected through the prior cycle reduced the effective cost basis to approximately $10.28.
ONDS traded near $7.50 at entry, with resistance near $8 and the SMA100 near $9.
The position remained below its effective basis, so the new CSP was structured for controlled cost-basis recovery rather than an immediate directional call.
Structure
Ten cash-secured puts were sold at the $7 strike, expiring September 25, 2026.
The position collected $0.22 per share, or $220 total, against $7,000 in collateral.
The $7 strike sat below the approximately $7.50 market price at entry and near the $6.50-$6.80 support zone.
The trade added defined downside exposure while keeping new assignment below the current market price.
Assignment Logic
If ONDS remains above $7 at expiration, the puts expire worthless and the $220 premium is retained.
If assigned, 1,000 additional shares would be acquired at an effective basis of approximately $6.78 per share.
The resulting position would hold 2,500 shares with a blended basis of approximately $8.88.
That would improve the existing effective basis by about $1.40 per share, or 13.6%.
Assignment was acceptable because the process objective was to lower the Wheel basis in a controlled way.
Premium Context
The position produced a 3.14% return on collateral over the 15-day holding period.
That equated to approximately 76.5% on a simple annualized basis.
Premium conditions were fair rather than a standalone volatility edge:
- implied volatility was approximately 70%
- historical volatility was approximately 80%
- IV Rank was approximately 14
- the strike was below market price at entry
- the trade improved the existing assigned-share basis if exercised
The premium compensated for accepting additional shares, but did not alone create the trade thesis.
Cost-basis recovery remained the primary reason for the structure.
Trade Structure
Management Plan
If ONDS remains above $7, the puts expire worthless and the $220 premium is retained.
If assigned, the new shares enter at approximately $6.78 effective basis.
The blended basis across 2,500 shares would improve to approximately $8.88.
No automatic addition follows assignment; any later adjustment depends on price structure and capital allocation.
The main objective remains recovery of the effective Wheel basis, not maximizing short-term premium.
Process Note
The existing ONDS position had already been assigned above the current market price.
A lower-strike CSP provided a defined way to add only if the market fell into the support area.
Assignment at $6.78 effective basis would improve the blended position basis by approximately $1.40 per share.
No prediction. Just process.
