Need help structuring a trade.

Lost me at hoping to be assigned. It certainly is a viable strategy but not one I find useful because if I want shares, I’ll buy shares. Just run the short puts, with a reasonable amount of margin buying power if possible. Otherwise, run csp until you are assigned.

Otherwise, run csp until you are assigned.

That's what I'm doing. Looking to get assigned with a margin of safety from these levels.

It isn’t difficult to get assign; simply open csp near-ATM. But if you can make profit with csp expiring OTM, there’s little point to buying shares at ATM where the success of the strategy depends on if you exceeded your breakeven (strike minus premium received) or not.

I did that last time it was at 120. Know what the stock did next ? It went to 90.71 at the lowest. It was only 200 shares. (2 Puts) I don't want to make that mistake again.

I’m not telling you to buy shares. You indicated your wish to get shares via assignment.

Well if you dont care about premium then sure, but I don't see why not. Are you happy to own the shares at 95 right $NOW? (haha.) or only in september? Looking at the premiums for that strike though, Weekly is 0.1 14DTE 0.35 +0.25 21DTE 0.75 +0.4 28DTE 1.05 +0.3 35 DTE 1.55 +0.5 Weird premiums, could be because theyre the spread from, friday close, but usually youd be better off selling 5 weeklies, premium wise if you wanted the stock anyway. If those prices are correct and not just skewed from friday expiry, then yeah looks like you've made a good trade. Only thing is if you truly think the drops are over then you may just be better off buying shares/calls.

That's the thing. I don't know if the drops are over. I've been in and out of this stock for months now. And Ive noticed this is at the high range of this stock. Everytime it reached this 125-130 level in the past 6 months, it has gone down to the 90s. I'm looking to go in but at a decent entry, so as to not get caught on one of those violent reversals.

In that case, judging by the somewhat weird options chain and providing those premiums i've seen are correct, then your premium per 7 days is actually increasing until the 11th of september. The only thing you may want to think about is if the price does drop closer to 105 then the premiums per week will increase and you'll be leaving cash on the table locking in your 1.55/1.7

What do you mean by increasing premium ?

So usually selling 5 weeklies will bring in more premium than 1 35 DTE. But here looking at the options chain I posted above that does not seem to be the case. The value for each week for some reason is increasing. Now this could just be week end shenanigans, it would be worth it to check each week again on monday after open

It did this once. Stay out of this trade, you’ve not done your homework.

What do you mean ? I think there is a chance it will go down but I'm bullish long term. That's why I want to open this trade

Oops. Wrong chart. 5x, corrected that. But it still begs the question of why you want to do this. What the chart actually should be telling you is that about once every month, NOW goes to 90. Yet you are trying to convince yourself that a \~30dte short put strike 15-20 above that is a money maker and willing to throw a minimum of, your figures, a notional value of $103,300 at it to likely lose several thousand dollars quickly. And it’s software. Go look at the 6m charts of other software companies like Oracle, Intuit, and Adobe. When the dust settles on this AI relevance war, their chop isn’t and won’t return to former highs. You’ve believed your own propaganda and fallen in love with a bad idea. It doesn’t need restructuring, it needs to be forgotten.

The last 2 paragraphs is where we disagree. I think the AI fear is way too overblown, and I do not believe that these Software companies will be wiped out. Some will, like Hubspot, maybe Duolingo, but most big F500 comps do not want to handle an inhouse solution. I've worked at 2, they all say the same. And even if these software companies are replaced, it will take at least a decade. It's not a matter of 1 2 year...

It’s you decision, good or bad. I’m not co-signing it.

Why not sell weekly atms and roll until assignment?

Because I did that last time it was at 120, I got assigned, and it went down to 90 at the lows. Took More than a month to recover to 120(06/25 -08/08)

Add a second rule to that. If you can roll, roll. It will let you go across most small dips without assignments. You'll collect a lot of cash and if you eventually do get assigned, your effective buying price will be decent.

Thanks for the feedback. I've been watching $NOW price for 6 months and trading it for 4. I think that ATM is not enough margin of safety. This thing could rip 5-10% in a day easy and as easy as it has gone up from 100 to 120 in a matter of days, it can come down just as quick.

I would grab something that is beaten down, and sell CSP to get into it.

Yes ! That is exactly what I'm trying to do with this trade !

The trade itself seems fine if $105 is truly a price you want to own it at. I’d just question doing all 10 contracts at once. Since you expect more volatility anyway, why not scale into the CSPs? Maybe part at $105, then add lower strikes if NOW keeps dropping. You have $300k available for the idea, so there’s not much reason to rush the first $100k in

Good idea. It was one of my other options. Maybe I'll do 5 CSP, then if it drops, buy shares. I was debating buying 500 shares right now@ 125, but I think it will snap back lower.

Yeah, I like that better. If you already think $125 could snap back lower, I wouldn’t feel any urgency to buy all 500 shares here. Let the price come to you 👍🏼

The premium on the nov 105 is low compared to selling puts weekly. Assignment probability is 23.5%. 76.5% probability is that you dont get the shares and keep a reduced premium

Thanks for sharing your thoughts !! Honestly its one of the other options that I've put on the table. Is to DCA into it, buying 200 shares, keep a lookout to see what it does, and buy more on the dips. I was thinking of mixing strategies, adding some CSPs in there.

Most people in this sub start off with “I want to own X stock at Y price”. And invariably panic if price is significantly below Y. You need to ask yourself if your conviction is strong enough to at levels below it. NOW at one point this year was close to 80. If you can’t stomach it, find a better trade.

I can stomach it and I have. I bought 200 shares at 120 and watched it go down to 90.71, before recovering. I'm now wanting to open a much bigger position, hence wanting a decent entry

Stagger your CSPs from 100 to 85. Less premium but better structure. Rinse and repeat every month.

I’m not sure if you think NOW has a ton of upside or if it’s just oversold. If you want the upside you need shares or calls. If you want to own shares with a margin of safety but establish more than a quick trade, I’d sell the CSP further out in time with at least some of my planned investment. October to Jan expirations. I’d keep a portion for selling near dated puts when the stock dumps and vol spikes. I’d put like 10-25% of my commitment towards that. If you think it has major upside, get shares. Maybe sell way otm calls against them when the stock spikes higher.

If you want to go long on a stock, just buy it outright. Using CSPs to do that is fine but you may not get assigned as you want. This my story: I sold 2x CSPs on MU in April went it was in the 320/350. Sure, I collected the premiums but missed the rocket because it went to the moon from there.

One number to check before doing this: NOW options are currently priced *below* the stock's actual movement. \~30-day ATM IV is \~56% while trailing realized vol is running \~66% — IV/HV about 0.85. You'd be collecting less than the movement costs. Which collides with your own thesis: you expect "more volatility and irrationality in the coming month" — and you're selling insurance priced below last month's weather. To be clear, the put still beats a bare limit order — you're paid to wait. You're just being paid below the going rate today: after the IV spike your own thesis predicts, the same $105 strike collects noticeably more. If you want to start now anyway, split it — a few contracts today, the rest on the pop.

There's nothing glaringly wrong about your approach, but a few thoughts: (1) What makes you think $105 is a fair price? Are you getting that from DD on fundamentals, analyst reports, or what? (2) If you are committed, why choose 9/11 expiry when the monthly expiries that would give you much better bid/ask spreads? (3) Is there a rush to do this? if not, consider spreading out the contracts across more expiries and some lower strikes. (4) talking about "throwing" $300k into one ticker seems like a cavalier attitude to a rather large investment. I'd like to have that much to "throw around".

As a note, probably not the most experienced but if you are trying to wheel this I would say put half, or a little less than half in CSPs at that price. If the stock falls enough below the price to make it hard to sell CCs at a profit then sell more OTM CSPs so that the recovery price is lower.

But the stock and sell covered calls.

I long IGV with leap call. selling put is a great way to miss the entire upward movement.