May 19, 2026
NVDA Closed +$394, ASTS Still Running — Here's What I'm Watching This Week
Key Lesson: Know Your Exit Before the Event: Managing CSPs Around Earnings
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The VIX is sitting at a very subdued 17.80 this week, which tells us that the options market is pricing in very little near-term fear. That's a double-edged sword for wheel traders — calm markets mean less whipsaw risk, but they also mean compressed premiums across the board. If you've been wondering why your CSP bids feel a little thin right now, this is exactly why. Enjoy the stability, but size accordingly and don't chase yield by going closer to the money than your plan calls for. Market breadth comes in at 55% of tracked stocks above their 200-day SMA, which lands squarely in neutral territory. We're not in a runaway bull where everything is lifting, but we're also not seeing broad deterioration. SPY is holding at $732.91 with no meaningful directional move this week, and the sector ETFs are similarly flat across the board — XLF, XLV, XLP, XLE, XLI, IWM all unchanged. This kind of quiet, sideways tape is actually a reasonable environment for the wheel if you stick to quality underlyings and avoid overextending into names with elevated beta just to squeeze out more premium.
Key Lesson
Know Your Exit Before the Event: Managing CSPs Around Earnings
The NVDA trade this week is a perfect illustration of one of the most important rules in the wheel: never hold a short put or call through an earnings report unless you have explicitly sized for the gap risk and accepted it. NVDA's $394 gain was captured by closing ahead of the May 20th report — holding would have introduced binary risk that no amount of premium justifies for most wheel traders. Make it a habit to check the earnings calendar the moment you enter any position, mark the date, and set your profit target or stop with that date in mind.
Featured Trade Analysis
$ASTS
This is my live CSP at the $65 strike expiring June 12th — I collected $3.55 with an IVR of 104% at entry, which is exactly the kind of elevated IV environment you want to be selling into on a high-beta name like ASTS. We're only up $5 mark-to-market right now, which is fine at 24 days to expiration — the trade hasn't had time to decay yet and I'm not in a rush. The position is working as designed: I sold premium when IV was rich, I've defined my risk at the $65 strike, and now I wait for theta to do its job.
High IVR at entry is your edge on a volatile name — let theta decay work before reaching for the exit.
$AAL
This covered call at the $12.50 strike expiring May 29th is showing $0 collected in the system, which likely reflects a near-zero premium at entry — a reminder that selling calls on very low-priced shares with low IV can sometimes produce disappointingly thin credit. With only 10 days to expiration, the primary value here is either getting the shares called away cleanly or letting the call expire worthless and reassessing the position. If the stock stays below $12.50 and the call expires, I'll be evaluating whether the shares are worth continuing to hold or rolling the wheel forward.
When a covered call produces minimal premium, the real trade management decision comes at expiration — have a plan for both outcomes before you get there.
$NVDA
This was a clean win — a CSP at the $185 strike expiring June 5th that I closed for a $394 profit on a single contract. NVDA had earnings coming up this week (May 20th), which means I was right to close the position before the event rather than hold through the binary risk. Locking in $394 with the earnings catalyst still ahead is disciplined trade management, full stop.
Always know your earnings date before entering a CSP, and have a profit-taking plan that gets you out before the event.
$AA
My CSP on AA at the $59 strike expiring May 29th closed for a $144 profit, a solid result on a commodities name that can move sharply on macro sentiment. AA is still appearing in this week's CSP candidates at a lower $56 strike, which tells you the stock has pulled back — validating the decision to take profits on the $59 strike rather than hold. This is the wheel working as intended: collect premium, close when profitable, reassess the new strike level on the next cycle.
Closing a profitable CSP and re-evaluating at the new lower strike is how you adapt the wheel to a stock that's drifting lower without taking assignment you didn't plan for.
IV Environment
With the VIX at 17.80, we are firmly in a low implied volatility environment this week — the kind of tape where IV rank on many names compresses and premium sellers have to work harder to find meaningful credit. The standout exception is QCOM at IVR 86% and IREN at IVR 69%, both of which suggest stock-specific IV elevation rather than broad market fear. In this environment, focus on the highest IVR names on the candidates list rather than forcing trades on names where IV has simply normalized.
Top Cash-Secured Put Candidates
| Ticker | Strike | Expiry | Premium | IV Rank | Ann ROC | Rationale |
|---|---|---|---|---|---|---|
| $IREN | $42 | Jun 18 | $2.74 | 69 | 79% | IREN offers a 79% annualized ROC with IVR at 69% and the stock sitting above both its 200- and 50-day SMAs, making this a high-premium opportunity on a technically constructive chart — though the extreme beta of 4.18 demands small position sizing. |
| $MRNA | $41 | Jun 26 | $1.76 | 64 | 41% | MRNA's IVR of 64% and 41% annROC are attractive, but the stock is below its 50-day SMA with a 14.3% drop over the past 30 days and IV/HV elevated at 40.5%, so approach this one cautiously with a smaller size and only if you're comfortable potentially taking assignment near recent lows. |
| $AA | $56 | Jun 18 | $1.73 | 59 | 38% | Having just closed a profitable CSP at the $59 strike, re-entering AA at the $56 strike gives a lower cost basis with IVR at 59% and 38% annROC — a sensible way to continue the wheel on a name I know, but I'd note the stock is below the 50-day SMA so I'm stepping down the strike to respect the recent weakness. |
| $DAL | $65 | Jun 26 | $1.77 | 41 | 26% | DAL is the most conservative pick of the week — IVR at 41% and 26% annROC reflect the low-IV environment, but the stock is above both moving averages, carries a reasonable beta of 1.25, and boasts 27k open interest providing solid liquidity for a lower-volatility wheel candidate. |
Top Covered Call Candidates
| Ticker | Strike | Expiry | Premium | IV Rank | Ann ROC | Rationale |
|---|---|---|---|---|---|---|
| $QCOM | $235 | Jun 18 | $5.28 | 86 | 27% | QCOM stands out this week with IVR at 86% — the highest on the board — collecting $5.28 at the $235 call with 27% annROC; the stock is up 45.8% over 30 days which makes this a natural place to cap upside while harvesting elevated premium, though the analyst consensus price target sitting 9% below current price is a flag worth watching. |
| $ON | $129 | Jun 26 | $3.04 | 64 | 23% | ON Semiconductor has surged 59.4% over the past 90 days and is above both moving averages, making the $129 call at 64% IVR a reasonable place to collect $3.04 in premium while participating in continued strength — just be mindful of the high beta of 1.94 if you're holding shares and the stock reverses. |
| $XLK | $185 | Jun 26 | $4.75 | 30 | 31% | XLK offers the cleanest risk profile of the three CC ideas this week — a sector ETF with 29k open interest, no single-stock event risk, and a 31% annROC collecting $4.75 at the $185 call, with the tech sector up 13.2% over 30 days making this a disciplined way to sell elevated calls into recent strength even at a modest IVR of 30%. |
Quick Tips This Week
- →With the VIX below 18, premiums are thin across most underlyings — prioritize stocks with elevated stock-specific IVR over broad market names, and resist the urge to move your strike closer to the money just to hit a yield target.
- →The earnings calendar is packed this week with major names including NVDA, WMT, and TGT all reporting — screen every new position against the full earnings list before entry and give yourself at least a one-week buffer beyond the report date when selecting expirations.
- →Neutral market breadth at 55% means the tape is not broadly trending in either direction — this is a good week to favor underlyings that are above their 200-day SMA rather than trying to catch falling knives, and to keep position sizes conservative until a clearer directional bias emerges.
Consistency in this game doesn't come from finding the perfect trade — it comes from applying the same disciplined process week after week until good habits are the only habits you have.
Trade logically,
James Henson
Founder, Option Wheel Logic
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Options trading involves significant risk, including the potential loss of the entire amount invested. Strategies such as cash-secured puts and covered calls may result in assignment of shares or missed upside. Past performance of any strategy or ticker mentioned is not indicative of future results. All data, strikes, premiums, and IV figures are sourced from third-party providers and may be delayed or inaccurate – always verify with your broker before placing any trade.
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