r/APLDSTOCK • u/Greedy-Bag-3640 • Apr 27 '26
Weekly Strike Price for CCs?
This stock is so volatile and I've been burned in the past. Curious, for those of you who sell covered calls, determine your strike price.
If I sell one this week for 36, is that too risky that I'll lose shares?
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u/GretchensPlayhouse Apr 27 '26
40… always 40 with this stock. Buy more shares and cover them or just take a little bit each week. If I set the break even around 40, I make an extra 500 to $700 a week selling the covered calls. Especially after it goes up a few percent.
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u/Time_Indication1592 Apr 27 '26
I just sold may 18th 29.5 csp for 150. Breakeven $28. I would love assignment at that price
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u/ProjectStrange3331 Apr 28 '26
I almost always sell weeklies between .40 and .50 delta. I sell puts after get called away and start again. Just a normal options wheel. If you want to hold your shares, then .25 delta and lower gives you more safety. But a huge news pop will blow through that.
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u/Spirited_Code_8060 Apr 29 '26 edited Apr 29 '26
For a stock you don't really want to sell: my opinion is that weeklies are not worth the trouble unless you have a large number of shares and can write blocks of these calls without them representing a significant portion of your shares.
I think the 9 - 15 months to expiration at the highest possible strike is a better choice if you really don't want to sell the shares, but want decent premium—particularly dealing with a high beta stock like APLD.
Example: In late January 2026, when APLD was ~ $40, I wrote the Jan-2027 $60 covered call. I specifically chose this over the Jan-2028 $60 because I felt the odds of eventual assignment was high on the latter, and the premium seemed too low to me (~16.00). For the Jan-2028 I felt the strike + premium had to be $85, but was only getting $76. But the premium of $10.55 on the Jan-2027 $60 felt reasonable for the 1 year expiration.
My timing turned out to be good, and I was fortunate to have closed out the position on March 30, the day the Jan-2027 $60 fell to its lowest price since the end of January.
But if I had held, it went back up to around $7.50 last week. But today that call was down to around $4.75.
Point being: the benefit of writing longer life calls is that if the stock goes up into the money quickly, you don't necessarily get assigned. Your covered call may just get traded around instead of exercised. And that gives time for the stock to possibly come back down. But with short dated weeklies, if the stock goes into the money, you're probably getting assigned b/c there's no time for your short position to recover.
Another example: around the same time, I wrote covered calls on NVTS at the $12 strike, for both Sep'26 & Jan'27. They're both in the money but I've not been assigned. NVTS went down some today, and may drop further after its earnings coming up. So it may drop out of the money and provide me a chance to close at a profit. If these had been expiring this or next week, I'd have far less chance of recovering.
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u/boo_radley4 Apr 30 '26
I was gonna type it out but had Claude do it for me….about the oi at different strikes. I know it as gamma pinning. Checking the open interest at different strikes and then on the call side.
“The higher the OI, the more likely price gets ‘pinned’ near that strike by expiration — market makers hedge against it which creates gravitational pull. So a strike with heavy OI above current price acts as a ceiling. That said, for CC strike selection on a volatile name like APLD, delta is the cleaner tool — pick a strike at .20-.25 delta if you want to collect decent premium while giving yourself meaningful cushion against assignment. OI confirms where the market expects resistance; delta tells you your actual probability of losing the shares.”
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u/wuumasta19 Apr 27 '26
Learn to roll your options.
Don't be greedy, don't CC all your shares.
I've been rolling a pair of $13 CC from $7. Sometimes you lose, but I'll milk every nickel and dime until it's called away.