Hood - Wheel Idea for smaller accounts

Brought up by VoodooTrader thought it could use its own thread. - Cut and pasted VoodooTrader’s comment below

Since OP was asking specifically about a ticker for a small account, depending on what you are working with — the amount of capital you’re looking to deploy in this venture, and/or the % of your account you’re okay with having in one ‘wheel’ recent earnings has brought a ticker I was previously short on ($HOOD) down to prices around the $10 level, even breaking below in the premarket on Friday 1/28.

The premiums on that stock for weekly expiry’s are pretty nice for the ‘premium : Cost for 100 shares’. Regardless of the complaints some have against the company, based on technicals this stock is pretty oversold, and bounced hard off of that $10 level up to around $12.5. I was able to sell a call for 2/4 on Friday’s session for 1.54 in premium; w/ ~$1000 investment for the shares in total. It’s definitely one to consider as it can be difficult to find a stock that is that cheap that has weekly options, a liquid chain, & also nice swings in IV expansion/contraction which gives a lot of opportunities to sell calls when IV expands and is inflated, then buy them back for profit on contraction/theta decay/underlying dips.

Personally I use more ratio call calendar spreads (which is one of my go-to starter position strats when I want a net long position in something), or PMCCs as I’ve become more comfortable with running spreads than actually holding share positions in the current market conditions, but with that said HOOD was so cheap w/ inflated premiums that I had to start a wheel on it this week. I picked them up for $10 to start it off. Lucid is one I’ve also sold calls against in the past, and when it dipped to 26 on Friday I was considering picking some up and plan to next week.


I liked Voodoo’s idea - sold12.50 puts for Feb 4th around .79 - so far looking good - but lots of time

I traded HOOD neutral position into earnings last week for pretty sizeable return by selling ATM calendar strangles. IV looks like its only slightly lower than when I opened that position. Good one for the watchlist.

Half-assed bear case
I believe the morning-post-ER-reversal on HOOD was spurred by a strong market. HOOD guidance has Q1 revenue down 35% YOY. It wasn’t a good call; it was just carried by strong SPX/BTC. I think the AH movement demonstrated just how much volatility is in this stock and which way it wants to go. Long term, I am neutral-to-bearish.

Bought my Hood contracts back for $10 since was really easy gains - if it dips again will prob re enter

Started Playing with HOOD Again -
Started with CSPs @ 13.50 Break-Even - is 12.98

My thoughts are - playing it pretty close to the edge - but the Past 7 days low is well above Break-Even - albeit a bit risky curious if anyone else’s that plays Hood has any insights?

I am fine with getting assigned and wheeling it back or selling it off next pop.

As expected got assigned on those puts - my current Hood cost per share average is 12.24
looking to selling $14 strikes next for around $50 - $70 - (currently at $37 as of close Friday) which is very aggressive but I think doable IF the market recovers - as I am sure it will long term for this option I need it Monday or Tuesday

Another option I have in mind is selling the shares outright for profits - this all assumes things are decent in pre-market -

This one I would say is so so - I got in way to high on this play but am green overall -
I don’t mind holding for a bit as I do think RH is a decent company - but not the best wheel option as much as a swing trade maybe -

If it does drop back near to $10 I will probably re-enter or expand depending on my position at the time