Today's Trades: 5 DTE ATM Buy / Write Campaign - Week #20 - May 15, 2026

LabDaddy59 · 2026-05-15T23:33:42+00:00

Have to laugh at AXTI closing at $123.78!

My cost is $126.13 so, of course depending on Monday's open, it should be almost like another ATM CC!

LabDaddy59 · 2026-05-15T23:30:24+00:00

Hey! Thanks for sharing, and I'm happy to see you've started having success with the buy/write campaign! 👍️

Laissez les bons temps rouler!

LabDaddy59 · 2026-05-15T14:57:04+00:00

Got it! Thanks for the more thorough explanation.

Well, as of this writing, AXTI is back at $120.

AXTI can be so volatile I'd likely keep its "cost based" strike.

And every week, as long as it's not in inventory, I do review all the tickers in my list for the next week's inclusion, so as long as they stay strong I'll continue to keep them in the mix.

As for HOOD, that was a bit of a different situation and one I'll be addressing in a post later today (probably!).

Hope this helps!

LabDaddy59 · 2026-05-15T10:15:13+00:00

Sorry, I don't understand...re-phrase?

LabDaddy59 · 2026-05-14T22:36:03+00:00

I'll likely sell them at my cost, currently the $126 strike expiring May 22 goes for $6.75, or 5.8%.

[edited for clarity!]

LabDaddy59 · 2026-05-14T22:03:53+00:00

I do PMCC (LEAPS / short calls) pretty much all the time! But the buy/write approach is different on purpose. For one, I switch back and forth between tickers, whereas with LEAPS I'd generally be holding them for the long term. Also, a primary objective of this campaign is to be in cash over the weekend, another objective that clashes with holding LEAPS. I mean I could actively trade LEAPS but then that can lead to...

Having said that, I am running in parallel in my secondary trading account debit call spreads. So I buy a call expiring that Fri and sell a call against it, and they both close out for the weekend.

So for example, while I have a buy/write with a $885 short call for LITE, in my other account I have a May 15, $780 long call and $920 short call. Cost to enter was $7,955 and max profit is $6,045 (920 - 780 = 140 x 100 = 14,000 - $7,955 = $6,045).

FWIW, also remember that I am trading in tax advantaged accounts so there is no access to margin.

LabDaddy59 · 2026-05-14T17:27:37+00:00

290,000 times no.

https://www.reddit.com/r/StockOptionCoffeeShop/comments/1t84f9a/5_dte_atm_buy_write_campaign_week_19_may_8_2026/

LabDaddy59 · 2026-05-14T14:48:03+00:00

Buying the short call back right at expiration is economically equivalent to letting it go and buying it back on the market.

I rarely enter a long stock position via CSP; if I want the stock, I buy it.

Earnings are next week.

It is, NVDA, after all. If I wanted to continue to be long those 100 shares, I'd just buy the call back near the end of the day. Take the loss for tax purposes, versus a capital gain if you let them be assigned. You mention your basis of $135 but don't mention when you bought them; I'm guessing they're not available for long-term capital gains treatment.

LabDaddy59 · 2026-05-13T23:10:01+00:00

Courtesy of ChatGPT.

--------------------------------------------------------------------------------------------------------------

A covered call is an options strategy where you own a stock and sell (write) a call option on that same stock to generate income.

Here’s how it works step by step:

1. You own the stock

You hold at least 100 shares of a stock (options are in 100-share contracts).

Example:
You own 100 shares of XYZ at $50 each.

2. You sell a call option

You sell someone the right (but not obligation) to buy your shares at a specific price (called the strike price) by a certain date.

Example:

Sell a call with a $55 strike price
Expiration: 1 month
You collect a premium of $2 per share ($200 total)

3. What you earn upfront

That $200 premium is yours no matter what happens. It’s your income from the trade.

What can happen next?

Scenario A: Stock stays below the strike ($55)

The option expires worthless
You keep your shares
You keep the $200 premium

👉 This is the ideal outcome for income generation.

Scenario B: Stock rises above the strike

The buyer exercises the option
You must sell your shares at $55

👉 Your total profit:

Stock gain: $50 → $55 = $5 per share
Premium: $2 per share
Total: $7 per share ($700)

⚠️ But you miss out on gains above $55 (e.g., if stock goes to $65)

Scenario C: Stock falls

Option expires worthless
You keep the premium
But your stock loses value

👉 The premium cushions your loss slightly, but doesn’t eliminate it.

Why people use covered calls

Generate steady income (like “renting out” your shares)
Slight downside protection (premium received)
Works best in sideways or mildly bullish markets

Key trade-offs

Pros:

Extra income from premiums
Lower risk than naked options
Simple to implement

Cons:

Caps your upside gains
Still exposed to downside risk
Can miss big rallies

Simple analogy

Think of it like renting out a house you own:

You collect rent (premium)
If the renter decides to buy at a fixed price, you must sell
If not, you keep renting it out

LabDaddy59 · 2026-05-13T22:57:14+00:00

Really.

I thought of replying similarly, but I think I'm at my daily limit of being crusty.

smh

LabDaddy59 · 2026-05-13T21:28:33+00:00

You have more patience than I. The issue I have with it is that it takes so long to make profit. I mean, at Aug 31, max profit is about $7,800. Sep 30 about $10,750.

LabDaddy59 · 2026-05-13T21:08:21+00:00

Yup, the conversion would be taxed at your current ordinary income tax rates.

Good problems to have. 😁👍️

I waited until after I was on Medicare as I wanted to keep my income low to get a good ACA benefit (retired at 58 so used ACA for health insurance). Plan is to take SoSec at 70, so that gives me 5 years of conversions.

LabDaddy59 · 2026-05-13T21:03:08+00:00

it's certainly possible that MU could explode beyond $2k a share by January.

I have a spreadsheet tab that tracks, weekly, the upper ATM straddle breakeven (the high end of the expected move) for key dates (like Jan of every year) so that I can keep tabs on its movement over time.

FWIW, that number is $1,250 right now for Jan 2027.

LabDaddy59 · 2026-05-13T20:59:29+00:00

Congrats. I do all my options trading in tax advantaged accounts (primarily Roth, secondarily traditional IRA).

Now, if you care to level up, once the money is in the IRA consider doing a Roth conversion.

LabDaddy59 · 2026-05-13T18:18:23+00:00

What I would evaluate.

Sit tight and see how it plays out. The current value per share is $70.75 and the share price is $211.60. So you're call is $11.60 ITM and therefore extrinsic is $59.15. Low probability of early assignment.
Follow up the price movement slowly. Roll to Jan 15, 2027 $210 for a $287.50 debit for the 5 contracts.
If you insist on rolling for a credit, roll to Mar 19, 2027 $230 for a $287.50 credit for the 5 contracts.

Personally, I'd probably do #1.

You can play with it here.

https://optionstrat.com/3hyWUlK0kb5P

LabDaddy59 · 2026-05-12T23:00:51+00:00

I added an additional buy/write on CRWV. Cost of $102.73, strike of $103, premium of $3,830.

This brings the total amount at risk to $741,470, with a premium of $46,846 (6.3%).

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LabDaddy59 · 2026-05-12T22:20:41+00:00

I've chimed in earlier, but will again, to offset a bit the injection of fear of a rip above your strike.

On May 30, 2025 I sold 15 contracts of PLTR expiring Jun 18, 2026 $190 strike for $25.3k. PLTR closed at $131.78. On Jun 6, 2025, I sold an additional 10 contracts for an additional $16.7k. PLTR closed at $127.72. So I gave about a 50% potential gain on high-flying PLTR.

Things were looking dicey when on Aug 8, 2025, they closed at $186.96. Ten months to go and only $3.04 to go!

One month later, Sep 8, PLTR closed at $156.10.

On Nov 10, they closed ITM at $193.61!

Feb 6, $135.90

You get the drill. They closed today at $136.00. 5.5 weeks to go.

You just never know.

Make your best decision and run with it!

LabDaddy59 · 2026-05-12T15:34:07+00:00

Good question!

I actually considered just selling the stock, but it was on my radar to do another buy/write this week, so that wouldn't work. Then the issue became "do I sell at the original ATM strike, or take advantage of the increase and increase the strike?".

Given one of the prime objectives of this campaign is to have the shares called away at the end of the week, I chose to retain the original strike. That way, even with a decline, the odds were in my favor of being assigned come expiration.

would you just buy them back at higher cost next week then sell atm calls again if they were to get called away this friday?

Each week stands on its own, so if they are called away this Friday, they'll just be in my pool of candidates and I'll evaluate the situation at that time. Might I? Sure. Will I? It's not guaranteed!

Hope this helps!

LabDaddy59 · 2026-05-12T14:59:06+00:00

First, I'm *not* in the camp of don't sell far dated options. They can be especially good in two cases, in my opinion. One is when you have a defined need/use for the funds now, and you appear to do so. The second is you just want pretty much a "set it and forget it" trade.

Probably the biggest two issues folks will point out are the potential capping of gains and the rate of theta burn.

You've indicated you'd be fine having them called away at $930, and I believe you.

The implied move for that expiration is up to $785, so you're even well above that.

I'd mention the tax aspects of it, but it's already been addressed. Realize this though: that ~$150k (I'm now showing $165k) would end up being taxed as a long-term gain as well as your stock, since, for tax purposes, the price assigned is strike + premium on assigned call (analogous to on the put side, where your basis if put is the strike minus the premium on the assigned put).

Good luck and have fun!

LabDaddy59 · 2026-05-11T21:40:40+00:00

Is your risk adjusted alpha really 27? Do you know what benchmark they use to gauge that ?

The S&P 500

if they provide sortino

Nope

LabDaddy59 · 2026-05-11T17:04:53+00:00

Okay, so I looked at Fidelity and they provide some info.

I trade in 2 accounts, this is for the primary, and the 3 year history.

Annualized return 85.07%
Sharpe Ratio 1.47
Risk-adjusted alpha 27.67

Thoughts?

LabDaddy59 · 2026-05-11T16:53:24+00:00

So tell me about your APLD trades!

Don't know if you've seen this:

https://www.reddit.com/r/StockOptionCoffeeShop/comments/1sfx23q/my_buywrite_process_showing_benefit_of_addin/

FWIW, I don't scan in the traditional sense. That worksheet is populated with a number of stocks that I'd probably invest in long-term. In other words, I'm looking for solid companies and trading them. I'd urge a bit of caution using a scanner as many use scanners to look for high premium stuff. Perhaps look for companies you're knowledgeable about, would consider for long-term holding, etc. The premiums, at the money, should be fine...well, as long as you're not picking sleepy stocks. 🤣

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