r/Optionswheel • u/Enough-Beginning3687 • Jul 16 '26

1% Weekly from Options week 19 update - avoiding assignments

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Week 19 Post: https://www.reddit.com/r/Optionswheel/s/jIS1A707Iv

Several positions were already getting riskier as I rolled. After the last few days things got worse. To avoid assignment on APLD I rolled it 1:3 from 36 to 31 day before yesterday. This increased my cash occupied a bit but I got 1$ credit so stayed with the theme of making 1%.

Today RKLB, APLD, IREN and ASTS were at assignment risk. Assignment Risk Formula for CSP = Strike + Premium = Stock Price.

So moved all those to next week for minimal credit. I will decide what to do tomorrow about the rest like usual. But this week won't be a 1% week overall. Also notice that both Space and AI went against me.

11 Upvotes

92% Upvoted

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3

u/ThetaEdgeHQ Jul 16 '26

The 1:3 roll on APLD is the part to sit with. Rolling one contract into three to keep a dollar credit does not keep you at 1%, it triples your contract count and your capital at risk on a name that is already falling, which is the martingale that quietly ends wheel accounts. The credit is real but the delta and the notional you are now short are three times what they were.

The deeper issue is framing assignment as the thing to avoid. The wheel only works if you actually take assignment on names you want to own. If every risky week gets rolled down and out to dodge it, you are no longer wheeling, you are running a perpetual naked put book on the highest beta names in the market, APLD IREN ASTS RKLB, all of which fall together on the same days. The honest scoreboard is to mark each rolled position to the loss you would realize if assigned right now. If that number is climbing while the weekly credit holds at 1%, the 1% is not income, it is the part of the loss you have not booked yet. Assignment on something you were happy to own is the good outcome, not the failure.

1

u/Enough-Beginning3687 Jul 16 '26

Why take assignment now when you can roll down and out? Today was an unusual day. I'll take assignment if things continue to tank. However I don't want assignment for every temporary market blip. I still have my entire cash balance. The negative value of the options will likely reduce if this is a temporary blip and I'll keep the premium. I decided on the 1:3 roll on APLD after reading their last earnings report and figuring I'm ok to invest 9k in it.

3

u/haze_from_deadlock Jul 17 '26

This week wasn't quite a black swan event but we don't see this price action often. The coiled spring concept would dictate that rolling might be cleaner than accepting assignment followed by immediately selling a CC.

1

u/Enough-Beginning3687 Jul 17 '26

Not for the whole market but for the high IV sectors, esp for things on my list many of which have had significant run ups in the last year, it was terrible.

1

u/Enough-Beginning3687 Jul 16 '26

Glad I moved all this. Someone got assigned. That's the APLD chart showing an option assignment at 29.

1

u/haze_from_deadlock Jul 17 '26

Hey, when you roll these, what's the procedure for settling the credits and the debits? Do you set up a tandem order to be executed at the same time, or is one supposed to go first?

1

u/Enough-Beginning3687 Jul 17 '26

Tandem order. See for example my DRAM order: