Trade Log: Selling RGTI May 16 $9 Put for $91 Credit
An options trade was placed in a $5,000 account by selling one Rigetti Computing Inc. (RGTI) May 16 $9 put option, receiving a premium of $91.
Trade Details:
- Underlying Asset: Rigetti Computing Inc. (RGTI)
- Trade Date: April 1, 2025
- Option Sold: May 16, 2025, $9 Put
- Premium Received: $91
- Account Size: $5,000
Rationale:
Rigetti Computing, a player in the quantum computing space, has seen elevated volatility amid speculative interest and sector momentum. Selling this put capitalizes on the increased option premium while managing defined risk in a small account.
Key factors influencing this trade:
- Elevated Premiums: Strong IV levels made the $9 strike particularly attractive for premium selling.
- Time to Expiration: With over 6 weeks to expiration, the position offers flexibility for management and potential rolling opportunities.
- Technical Setup: The $9 level sits near recent support, offering a buffer against near-term downside.
Trade Outcome Scenarios:
- Stock Price Above $9 at Expiration: The put expires worthless, and the full $91 premium is retained as profit.
- Stock Price Below $9 at Expiration: The trader may be assigned 100 shares of RGTI at $9, committing $900 of capital. After accounting for the $91 credit, the effective purchase price would be $8.09 per share. However, the strategy is to continue rolling the position forward, collecting more credit until it eventually expires worthless.
Risk Management:
- Sizing: A potential $900 obligation represents a manageable risk within a $5K account.
- Rolling Plan: The position will be actively monitored with a plan to roll out in time or down in strike as needed to avoid assignment and enhance premium intake.
Conclusion:
This trade reflects a high-risk-adjusted income opportunity in a small account, using strategic put selling and proactive management to grow capital efficiently.
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