To The Moon

Turning Small Wins into Bigger Gains – My IWM Put Option Adjustment Story 💼📈

🎯 The Initial Trade – Locking in Quick Premium

On August 7, 2025, I sold one IWM put option with a strike price of $223, expiring on August 11, for $1.78 per share ($178 total premium). My plan was simple: sell high and buy back lower, pocketing the difference.

On August 11 at 22:10:58, I bought back the same option for $1.66 per share ($166 total), locking in:

(1.78 - 1.66) \times 100 = 0.12 \times 100 = \mathbf{12\ USD}

A small, clean win — but more importantly, it freed up my capital for the next move.

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🔄 The Roll Forward – Extending Time for More Premium

Immediately after closing the first trade, I rolled forward to a later expiry. I sold another IWM put, same strike of $223, but expiring on August 13, 2025, for $2.95 per share ($295 total premium).

This move collected more premium thanks to extra time value, without changing my strike price or risk profile.

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💰 Total Premium Potential

Combining both legs:

• First trade profit: $12

• Second trade premium: $295

Maximum potential profit if the August 13 option expires worthless:

(2.97 + 0.12) \times 100 = 3.09 \times 100 = \mathbf{309\ USD}

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⚠️ Understanding the Risk

While the upside looks good, the downside needs to be respected:

• Max loss if IWM fell to $0:

223 \times 100 = 22,300\ USD

Since I received $309 in premium, that’s slightly reduced, but still about $22,000 of capital at risk.

• If IWM drops 50% from the strike:

223 \times 50\% = 111.50

Loss per share = $223 – $111.50 = $111.50

111.50 \times 100 = 11,150\ USD

That’s roughly $11,000 in losses in a severe drop.

These numbers show why position sizing is key — the goal is steady income, not gambling the house.

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📊 Why This Worked

1. Quick Profits Locked In – The $12 realized gain protected me from reversal risk.

2. Rolling for More Premium – Extra time value meant extra income without increasing strike risk.

3. Clear Risk Awareness – Knowing the downside keeps me disciplined and calm.

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🌟 Takeaway

From $12 in quick profit to $309 potential income, this trade is an example of stacking small wins through rolling options. But the risk profile reminds me: options selling is like being an insurer — the premiums are steady, but you must prepare for rare disasters.

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If you want, I can now draw a risk-reward flowchart showing:

• Initial $12 gain

• Roll to $2.97 premium

• $309 total potential profit

• $22,000 max loss vs. $11,000 in a 50% drop

That would make the trade story even easier to grasp visually. Do you want me $IWM 20250813 223.0 PUT$ to do that next?

@TigerStars @Daily_Discussion @TigerStars