Week 3: $3,861 in Realized Profits trading Options
Weekly Options Trading Journal - Week 3 (June 16-20, 2025)
Weekly Options Trading Journal - Week 3 (June 16-20, 2025)
New here? Read Week 2 of my options trading journey to see how I navigated my first assignment with LULU and generated $707 in realized gains.
The Week of Strategic Execution
Week 3 focused on executing planned strategies while building new systematic positions for future income. The week delivered solid realized profits from closed positions, particularly the RDDT short strangle, while establishing a foundation of new weekly positions across multiple quality names.
The result? Strong realized performance from closed trades while positioning for continued systematic income generation.
By The Numbers: Week 3 Realized Performance
The Trades: Closed Positions and New Systematic Builds
RDDT Trade-Off: Solid Profit with Missed Upside
The RDDT short strangle established in Week 2 reached its conclusion with mixed results - good realized profits but significant missed upside.
RDDT Short Strangle - CLOSED POSITIONS:
Stock profit: $2,539.97 (200 shares × ($121 - $108.30))
The Reality Check: RDDT closed at $139.15 on expiration day. By getting called away at $121, I left approximately $3,630 in additional gains on the table (200 shares × $18.15). This illustrates the fundamental trade-off of covered calls: steady income with capped upside.
Other June 20th Closures
Completed Expiration Trades:
Both positions expired as planned, generating solid income through time decay on quality underlying stocks.
New Systematic Positions (Still Open)
While not yet realized, Week 3 established systematic weekly positions across multiple quality names:
New Weekly Positions (6/27 Expiration) - OPEN:
These positions represent the systematic scaling approach but won't count as realized profits until closed.
Position Management: Execution and Learning
1. Accepting Assignment Trade-Offs
The RDDT call assignment demonstrates the core covered call principle: we captured solid profits ($3,495) but gave up significant additional upside ($3,630). This wasn't a mistake - it's the inherent nature of the strategy.
2. Systematic Position Building
The five new weekly positions show the evolution from single-trade focus to systematic income campaigns. While still open, all are currently profitable with time decay working in our favor.
3. Quality Stock Selection
Choosing ABNB, AMD, META, and UBER reflects focus on established, profitable companies with strong fundamentals - reducing the risk of adverse movements.
4. Diversified Timeframes
Maintaining both weekly expirations and longer-term positions (like the July CPRT positions) creates multiple income streams with different risk profiles.
Current Portfolio Status
Recently Closed Positions (Realized):
RDDT: 200 shares called away, short strangle completed
AMAT: Short call expired worthless
UBER: Short call expired worthless
Active Weekly Positions (6/27 Expiration): All five new positions are currently showing unrealized profits as time decay works in our favor.
Stock Holdings for Future Income:
AMAT: 100 shares (available for covered calls)
ASML: 100 shares (strong position)
CPRT: 400 shares (enhanced income potential)
LULU: 100 shares (recovery position)
RDDT: 100 shares (remaining exposure at $135.12 cost)
Total Stock Holdings: 700 shares across 5 quality companies
What's Working and What's Challenging
Successful Execution:
Systematic approach: Building consistent weekly positions across quality names
Disciplined closes: Accepting assignments and expirations as planned
Quality focus: Strong underlying companies providing better outcomes
Diversification: Multiple positions reducing single-stock dependency
Areas for Improvement:
Strike selection: RDDT $121 calls capped significant upside
Rolling decisions: Could explore rolling up and out on winning positions
Position sizing: Optimizing allocation based on volatility and conviction
Timing: Earlier action on in-the-money positions might preserve more upside
Lessons from Week 3
Key Takeaways:
Covered calls cap upside: RDDT's rise to $139 vs. $121 assignment shows the trade-off
Systematic building works: Five quality positions established with good initial results
Quality matters: Strong companies provide better option premiums and stability
Diversification helps: Multiple positions reduce impact of any single outcome
Discipline pays: Following the plan generates consistent results even if not optimal
Strategic Insights:
The week reinforced that systematic options income trading is about consistent execution rather than trying to time perfect entries and exits. The RDDT trade generated good profits despite leaving money on the table - this is the nature of covered call strategies.
Looking Ahead: Week 4 Focus
Immediate Priorities:
Manage 6/27 expirations: Five positions currently profitable
Deploy 700-share stock portfolio: Enhanced covered call opportunities
Continue systematic approach: Build next week's income positions
Strategic Development:
Refine strike selection: Balance premium collection vs. upside retention
Optimize position sizing: Based on volatility and conviction levels
Enhance rolling strategies: Explore up-and-out rolls on winning positions
The Reality of Systematic Trading
Week 3 demonstrated both the benefits and limitations of disciplined options income trading:
The Good: $3,861 in realized profits from systematic execution of planned strategies across quality names.
The Learning: RDDT showed how covered calls work in practice - good profits with capped upside when stocks continue rising.
The Foundation: Five new systematic positions established across quality companies, setting up future income opportunities.
This week reinforced that successful options income trading isn't about perfect execution - it's about consistent application of sound principles across quality underlying assets.
Next week: Managing the current systematic positions while continuing to build the weekly income approach.
Disclaimer: This is educational content documenting actual trades. Options trading involves significant risk and is not suitable for all investors. Assignment requires substantial capital and can result in significant losses. Past performance does not guarantee future results. Always do your own research and consider your risk tolerance.