Sold 1 CoreWeave. (CRWV) April 17 $50 put option, receiving a premium of $600.
Trade Details:
- Underlying Asset: CoreWeave(CRWV)
- Trade Date: April 1, 2025
- Option Sold: April 17, 2025, $50 Put
- Premium Received: $600
- Account Size: $100,000
Rationale:
Key considerations:
- Elevated IV: Higher implied volatility inflated option premiums, increasing income potential.
- Support Zone: The $50 level has acted as a recent technical support, adding conviction to the strike selection.
- Time Value: With over two weeks to expiration, there’s ample time to manage the position or roll if needed.
Trade Outcome Scenarios:
- Stock Price Above $50 at Expiration: The put expires worthless, and the full $600 credit is retained as profit.
- Stock Price Below $50 at Expiration: The position may be assigned, requiring the purchase of 100 shares at $50 each. Factoring in the $600 premium, the effective cost basis would be $44.00 per share. However, the plan is to continue rolling the position forward to collect additional credit and avoid assignment until the option eventually expires worthless.
Risk Management:
- Capital Allocation: A potential $5,000 commitment fits within the risk parameters of a $100K account.
- Rolling Strategy: If CRWV trades near or below $50 as expiration nears, the position will be evaluated for a potential roll to a later date and/or lower strike to extend the trade and improve the credit.
Conclusion:
This trade reflects a high-premium, short-duration opportunity to generate income in a larger account while maintaining flexibility through active management.
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