IONQ, IREN & AXTI banked: my wheel week and this week's top CSP/CC setups

Key Lesson: Cost Basis Reduction Is a Long Game

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Market Recap

The index tape was a snooze this week: SPY closed at $778.01, down 0.01% on the day and up just 0.10% over five sessions. With the VIX at 15.27, the market isn't pricing in fear, and that shows up in premiums on the big, boring names, which are thin compared to what we saw a few weeks ago. Breadth is the more interesting read: only 43% of tracked stocks sit above their 200-day SMA, which tells me the index is being held up by a narrow group while a lot of the market is just treading water. Under the surface there was real rotation. Energy (XLE, +1.80%) led while healthcare (XLV, -1.35%) got sold hard, and financials (XLF, -0.42%), small caps (IWM, -0.43%) and QQQ (-0.33%) all leaned slightly red. Tech (XLK, -0.04%) was basically flat. Heavy bank earnings hit the calendar starting Tuesday (JPM, WFC, GS, C, MS, BAC), so expect financials to move the tape this week. I'm staying selective: quality names above their 200-day, delta around 0.25, and nothing with earnings inside the expiration window.

Key Lesson

Cost Basis Reduction Is a Long Game

This week's trades show the two sides of the wheel: clean wins like AXTI and the expired IREN call, and slower grinds like IONQ, IREN and MARA where the stock is underwater and the calls are paying down the hole a little at a time. Don't judge a covered call by one cycle's premium; judge it by how much it lowers your breakeven over several cycles. And when a short put like DRAM goes red, the question isn't 'am I wrong?' but 'would I still happily own this at my strike?'

Featured Trade Analysis

$AXTI

I closed my $70 cash-secured put expiring 10/09 for a +$220 win on one contract. The stock stayed well above the strike, so I let time decay do the work and kept the full premium story simple.

When a CSP goes your way, banking the win and freeing up capital beats trying to squeeze out the last few dollars.

$IONQ

I closed my $55 covered call (10/23 expiry) for +$129 and immediately have a new $45 call (11/20) working. That new call is only +$21 mark-to-market with $1.01 collected, and my shares carry a $342 unrealized loss, so I'm treating the calls as a cost-basis reduction tool rather than a profit center.

Selling calls below your cost basis only works if you're comfortable realizing a loss on assignment, so size the strike to a price you'd truly be happy to exit at.

$IREN

I banked +$103 on the $47 covered call that expired 10/09, then sold a fresh $45 call for 11/20 at $1.25 with IV rank at 77% at entry. It's +$12 MTM so far, against a $461 unrealized loss on the shares.

High IV rank is the best time to sell calls on a volatile name, but it doesn't erase the underlying drawdown, so keep the stock position size honest.

$DRAM

My 2-contract $55 cash-secured put (11/06) is currently showing -$519 mark-to-market against $1.48 collected, with IV rank at 47% at entry. It's the one position under pressure, but I'm still well inside the time I need and I'm happy to own shares at the strike.

A CSP in the red is only a problem if you wouldn't want the stock at the strike, so only sell puts on tickers you'd gladly own.

$MARA

I'm running 4 contracts of the $14 covered call (11/06) collected at $0.29 each, entered at an 80% IV rank, and it's +$100 MTM. The shares are down $308 unrealized, so this call is helping offset the drawdown while IV stays elevated.

On a beaten-down, high-IV stock, selling out-of-the-money calls steadily chips away at the loss without capping a meaningful rebound.

$COPX

My $80 cash-secured put (10/16) is 2 days from expiration and sitting at +$100 MTM on $1.15 collected, entered at a 43% IV rank. Barring a sharp reversal, this one is headed for max profit.

With a couple of days left and most of the premium captured, think about closing early to redeploy capital rather than carrying expiration risk for pennies.

IV Environment

With the VIX at 15.27, broad index IV is subdued, so the best premium is coming from individual names with their own catalysts rather than from the market as a whole. CVNA hit a 100% IV rank and PSA jumped to 69%, while KWEB, HAL and BITO saw their ranks collapse after prior spikes. Stock-specific volatility, not market volatility, is where the opportunity is right now.

Top Cash-Secured Put Candidates

Ticker	Strike	Expiry	Premium	IV Rank	Ann ROC	Rationale
$NET	$310	Nov 20	$12.85	57	41%	Cybersecurity leader above both its 50- and 200-day SMAs with a healthy 57% IV rank, paying a 41% annualized return at a 0.25 delta.
$SMCI	$34	Nov 20	$1.77	47	51%	The highest annualized return on the list at 51% with the stock above both key moving averages, but beta of 2.01 means size it small.
$ETSY	$70	Nov 20	$2.29	72	32%	A 72% IV rank and IV well above realized vol gives rich premium on a name trending above both SMAs, though open interest is thin so use limit orders.
$ANET	$185	Nov 20	$5.82	45	31%	A quality AI-networking name with a 90-day gain of 19% and a solid 31% annualized return at a 0.25 delta, giving cloud/AI diversification.
$ETHA	$52	Nov 20	$1.54	35	29%	A crypto-exposure put with a lower 35% IV rank but a 29% annualized return and a 0.26 delta, adding a diversifier outside single-stock tech.

Top Covered Call Candidates

Ticker	Strike	Expiry	Premium	IV Rank	Ann ROC	Rationale
$FRO	$69.2	Nov 20	$1.48	100	21%	A maxed-out 100% IV rank in energy, the week's strongest sector, though RSI of 77 says the stock is extended so the call gives you a nice cushion.
$MRNA	$290	Nov 20	$8.15	95	28%	A 95% IV rank pays a 28% annualized return, but a 242% 90-day run means this one is for shares you're comfortable having called away.
$ZETA	$40	Nov 20	$1.2	57	30%	A 0.30 delta call with a 30% annualized return and IV well above realized vol, rewarding you for holding a strong trending small-cap.
$VST	$185	Nov 20	$3.92	88	21%	An 88% IV rank on a more moderate RSI of 60 makes this a less stretched way to harvest premium in the power/utilities space.
$DDOG	$340	Nov 20	$8.35	49	24%	IV running well above realized vol at 45% makes the $8.35 premium attractive on a software name that's up 28% in 30 days.

Quick Tips This Week

→With the VIX near 15, premiums on index-heavy names are thin, so go after stock-specific IV rank above 50% rather than stretching to a higher delta to make up the yield.
→Only 43% of stocks are above their 200-day SMA, so insist on names above both their 50- and 200-day averages before selling puts; it keeps you on the right side of the market's narrow leadership.
→Big bank earnings land this week and more heavyweights report 10/20, so check the earnings date before every trade and keep expirations from straddling a report.

The wheel rewards patience and discipline far more than prediction, so keep your size sensible and let time work for you.

Trade logically,

James Henson

Founder, Option Wheel Logic

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Disclaimer: This newsletter is AI-assisted market commentary for informational and educational purposes only. It is not financial advice, a solicitation, or a recommendation to buy or sell any security. Option Wheel Logic is not a registered investment advisor, broker-dealer, or licensed financial professional.

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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