Market Context
Volatility remains compressed near 16 after recovering from recent lows. Option premiums remain relatively modest across the broader market.
SPY has pulled back from recent highs but retains constructive structure, with price moving back toward short-term support. QQQ shows greater weakness after losing short-term momentum and testing the SMA50 area.
Earnings risk becomes more concentrated this week around Nvidia and technology names. Several consumer companies also report throughout the week.
Market behavior has become less uniform across the major indices. Current conditions favor patience, stronger support levels, and greater selectivity.
Last Week — Trade Recap
Note: Cash-secured put sold near the SMA100 support area after the recent news-driven repricing. ADX remained below the standard trend threshold, making this a deliberate discretionary entry rather than a standard rule-based setup.
Note: Covered call sold after the post-earnings recovery brought IONQ back toward the SMA100 area. The $50 strike left additional upside while accepting a possible capital-release exit below the original $57 assignment basis.
Note: Cash-secured put sold after a sharp red day pushed ASTS into an extreme short-term oversold condition. The $1.45 premium lowered effective assignment to $63.55, directly into the $63-64 support zone.
Note: Cash-secured put sold after the substantial pullback from recent highs, with the $89 strike positioned near SMA100 support around $89. The $1.65 premium lowered effective assignment to $87.35, below that support area.
Note: Covered call sold after SOFI recovered above the EMA21, EMA34, SMA50 and SMA100. The $20 strike remains above both the $17 assignment basis and the adjusted cycle cost basis while preserving additional upside.
Note: Covered call sold after HIMS recovered into the low-$32s following several weeks without an active call. The $35 strike remains above the $33 assignment basis and preserves additional upside while restarting premium collection.
Current Positions
Plan: The $50 covered call expired worthless. Shares are trading around $44.86 and remain below the $47.37 adjusted cycle cost basis. Covered call management resets from here.
Plan: Shares are trading around $8.71 and remain below the $10.28 adjusted cycle cost basis. Covered call management remains selective while waiting for further recovery.
Plan: Covered call active at the $20 strike through August 28. Shares are trading around $18.91, leaving the position below the call strike and comfortably above the adjusted cycle cost basis.
Plan: Shares remain well below the assignment basis at approximately $110.42. Covered call management remains deferred while waiting for a meaningful recovery toward acceptable strikes.
Plan: Covered call active at the $35 strike through August 28. Shares are trading around $33.78, placing the call relatively close to the current price while keeping any call-away above the original assignment basis.
Plan: Shares are trading around $153.25 and remain below the $183.60 adjusted cycle cost basis. Covered call management remains deferred while waiting for recovery toward a more acceptable exit level.
Plan: Assigned following expiration of the $98 CSP. Premium lowers the effective basis to $96.92. Shares are trading around $90.07 and covered call management begins from here.
Plan: 4 contracts. Break-even: $87.35. Position remains open near the SMA100 support area.
Watchlist
AGGRESSIVE
BALANCED
SAFE
What I Am Not Touching
No trades into earnings. Nvidia reports this week alongside several technology and consumer names. Event risk remains incompatible with short-dated Wheel entries.
No chasing extended momentum. Several high-beta names moved sharply last week and now trade well above the support levels that would provide acceptable assignment entries. Strong momentum does not justify poor strike location.
No premium-driven deployment. VIX remains near 16 and broader option premiums remain modest. Elevated premium in individual names continues to require a clear structural reason before capital is committed.
No forced covered calls. Several assigned positions remain below acceptable call-writing levels. Premium collection remains secondary to maintaining an acceptable exit if shares are called away.
Process Note
Last week showed several different outcomes from the same process.
ASTS expired worthless after a three-day CSP, allowing the full premium to be retained without taking shares. INTC finished below the $98 strike and moved naturally into assignment. IONQ’s covered call expired worthless, leaving the shares available for another management decision. HOOD, SOFI, and HIMS remain open into this week.
Different outcomes do not require different rules. The decision is made when the trade is opened. For a CSP, the strike and effective assignment price have to make sense before knowing whether the option will expire or shares will be assigned. For a covered call, the exit at the selected strike has to be acceptable before knowing whether the shares will actually be called away.
That becomes particularly important in a market like this one. SPY remains structurally constructive, QQQ has weakened, volatility is subdued, and individual stocks are behaving very differently from one another. There is less reason to treat broad market direction as sufficient confirmation for an individual Wheel entry.
This week therefore starts with the same requirement on both sides of the Wheel: the price has to make sense first.
If that means fewer trades, that is the trade-off.
The Wheel does not require constant rotation. It requires acceptable entries, acceptable assignments, and acceptable exits.
Selectivity remains high. Back to execution.
— Wizolver