To The Moon

Friday was a good day to own miners.

Bitcoin pushed back above $80,000 in the afternoon, which is not what most people expected this week. The CLARITY Act — the market-structure bill a lot of the industry was counting on — failed in the Senate. There was a Fed decision on top of it. Between them that should have been enough to keep a lid on things.

Instead crypto shrugged and went up.

MARA closed Thursday at $11.64. On Friday it opened at $12.12, ran as high as $13.32, and finished at $13.24. Up 13.7% in one session.

If you hold it, you already know. Nice change.

Here's the part that isn't purely good news.

What a 14% day does to a covered call writer

I own 40,546 MARA shares and I sell calls against them. That's the deal — I collect premium up front in exchange for agreeing to hand the shares over at a set price if the stock gets there.

Slow grind upward, that's perfect. The calls decay, I keep the money, I write some more.

A 14% day is different. Strikes that looked comfortably out of reach on Thursday morning are suddenly through the money.

By Friday's close:

Calls I'm short: 405 contracts

In the money: 220 contracts

Shares that would be called away: 22,000

That's more than half the position, at strikes between $12.50 and $13

So there's a decision to make, and it's not obvious.

Option one — let them go. The shares get called at $12.50 and $13, I bank the gain, and my position gets a lot smaller. That's the wheel working as designed. You agreed to sell at that price, the price came, you sell.

Option two — roll them up. Buy the in-the-money calls back, sell new ones at higher strikes further out. You keep the shares, you keep the upside above $13, and done properly you get paid a credit to do it rather than paying one.

What I did

I rolled. All of it.

110 calls at $12.50 expiring 25 Sep → $13 on 9 Oct. Took in $2,200.

40 calls at $13 expiring that same day → $14 on 9 Oct. Took in $2,120.

20 calls at $12.50 on 2 Oct → $13 on 16 Oct. Took in $260.

And the puts got moved too, which is the half most people forget:

100 puts at $11 → $12 on 9 Oct. Took in $3,500.

30 puts at $10.50 → $11.50 on 9 Oct. Took in $1,440.

About $9,520 of net credit on the day, and I didn't give up a single share.

The put side is worth dwelling on. When the stock rips, puts you've sold underneath it go nearly worthless — I bought those $11 puts back for 14 cents. So you close them for loose change and sell new ones higher up, where the premium is actually worth collecting. The $12s went for 49 cents. The stock going up is what let me lift the whole floor with it.

Why roll, and what it costs

Because I didn't want to sell my largest holding into a 14% day at $13.

That's the honest reason. Momentum days in these names don't usually resolve in one session, and if MARA carries on toward $15, being called away at $12.50 on 22,000 shares is a serious amount of money left on the table.

But it isn't free, so let me put the other side properly.

MARA is far too big a share of what I own — I've been saying so for weeks. Getting called away on half of it at $13, well above my $11.35 average, would have fixed that at a good price without me having to sell anything at a bad one. Rolling up means I keep the concentration exactly where it is and I need the next move to be up as well.

I picked upside over trimming, on the one day the market handed me a clean way out. If MARA gives it all back, that's a bad call. If it runs, it looks obvious.

I don't know which, and that's precisely why I'd rather write it down now than explain it afterwards.

From here

The rolled calls sit at $13 and $14 through early and mid-October. If MARA holds up there, I'll be having the same argument with myself in three weeks.

At some point the answer has to be "let them go." I'm not sure this was that point.

The rest of it

Full write-up is on my newsletter this week — every roll with its actual cost, what the whole book did, and the long-dated positions I rotated through, including one I bought and sold inside a week.

Free and weekly, at mathematicalmoney.substack.com.

Back here as usual. Real question for you though: on Friday, would you have rolled up or taken the call-away? I can argue both and I'd like to hear which way people lean. Drop it in the comments.

Stop guessing. Start calculating.

Live to fight another day. 🤙