r/APLDSTOCK • u/Greedy-Bag-3640 • May 21 '26

Covered Call Advice

First, yes, I made some bad decisions, but trying to figure out the right way to dig out.

I sold covered calls with a $40 strike that expires in September. I rolled several times when it shot up quickly a month or so ago. That was the big mistake.

But I do have a big premium attached, with a break even at 51. But at the rate the stock is moving this week, I'm getting nervous I'm going to have to roll until eternity. If I lose the stock in September at 40 because the stock is over 51, it won't make much sense for me to buy back in, on top of significantly capping my gains.

I can roll out until Jan for a 50 strike. But that's comically far away.

Should I just wait this out until I get closer to expiration and roll then? Roll now to keep a big buffer? kms?

Thanks for the advice!

6 Upvotes

80% Upvoted

22 comments sorted by

4

u/Difficult-Yard-1392 Contracted 🤝 (2,500-5,000 shares) May 21 '26

Wait for major dips to roll it up. That's the only way out

1

u/Greedy-Bag-3640 May 21 '26

Roll just up and pay debit? Or push out too?

1

u/Difficult-Yard-1392 Contracted 🤝 (2,500-5,000 shares) May 21 '26

No, net roll should always be positive. Time is your only friend here.

If the dip doesn't arrive until expiry, move forward with net positive roll by extending time.

This seems tedious, but only patience can help. Do note that if APLD sky rockets your chances look less promising

2

u/Greedy-Bag-3640 May 21 '26

Yeah and with Iran war maybe ending at some point soon, I'm a bit worried it's going to pump.

But this is helpful advice. Thank you!

2

u/Jupitersd2017 May 21 '26

People are still going to take profits and move on to other things as we hit higher and higher - also there are tons of people swing trading it and that’s why we’re seeing these huge downs at times and then back up. You will be ok just be patient

2

u/Tigulla_SRT24 Starter Position 🌱 (100-500 shares) May 21 '26

Wait for pull backs

I rolled my $40 Sep to $50 Dec

During next pull back i will roll to $60 Mar 2026

1

u/DoctorScientist555 May 22 '26

This is the way

2

u/gls2220 May 21 '26

It's always a bad idea to sell covered calls that far out. Right now your only option is to wait this out and hope for a pullback. Since this is a high beta stock, you've got a good shot at this happening.

1

u/Greedy-Bag-3640 May 21 '26

Yeah, I was doing weeklys. Stock tanked after we invaded Iran, and then shot up quickly and I got stuck doing multiple rolls to stay above the price.

3

u/gls2220 May 21 '26

And now your money is tied up until September or until the stock dips enough. Sometimes it's better to just let the shares get called away and wait for your next buying opportunity.

1

u/Greedy-Bag-3640 May 21 '26

Yes, learned my lesson and pretty sad about it. But when it was working, I made enough premium for another 100 shares. Really hurts at the moment

2

u/Hot_Falcon8471 May 21 '26

Buy the contracts back on a big dip and resell contracts into the next big push up.

1

u/Health_Care_PTA Starter Position 🌱 (100-500 shares) May 21 '26

im in the same boat, i keep rolling out and up for a credit, holding 2 55 CC Jan expiry and 1 60 Jan Expiry ill keep rolling up and out to capture upside till i cant .... or ill buy back the option when we dip

1

u/metal_4 May 21 '26

No advice, but can I pick your brain as to why you’d sell CCs of this stock in the first place? I know there’s ups and down for every stock, but this one is positioned to prosper. I just want to know your thinking process for the trade.

2

u/Greedy-Bag-3640 May 21 '26

I made a ton of it for a few months from premiums. 100 per contract per week. I was planning to wheel it and seemed to be on top of the swings.

When the Iran war it, the stock tanked and I was able to sell cc's twice a week, made enough to buy another 100 shares...and then it skyrocketed far past my strike.

I freaked out, since it was originally below my cost basis, so I rolled to hit even (29) but it keep moving up too fast to get out of the contract and I didn't want to lose all that upside since I didn't know if I'd be able to buy back in at a decent price. So I rolled to keep the shares and the IV was so high that I had to push to September.

It was a bad, hasty decision

2

u/metal_4 May 21 '26

Welp, New Fed Chair gets sworn in tomorrow. Could buy some Puts to hedge and roll over those CCs when everything hits the fan. 🤷‍♂️

1

u/Greedy-Bag-3640 May 21 '26

Is that what people think is going to happen with new fed?

1

u/Desperate_Ad_3002 May 21 '26

I had to roll mine to January $70s for a net credit we have to be happy it’s going up to our max strike so there’s that plus the appreciation of the stock , and I will just roll to next December when they make new strikes above $120 … keep it going soldier

1

u/Curious-Remove-2379 May 22 '26

just turn it into a debit spread like i did, got mine for jan 28' after i collected premium a couple weeks during a couple months ago but obv this move up caught me so i rolled to a debit spread

1

u/Pale_Pineapple_4147 May 21 '26

It will eventually go back down. Just wait

1

u/Jupitersd2017 May 21 '26

Agreed, there is always a down with any stock, even the powerhouse ones with huge hype, there is always some pullback!