Verso · the exercise
HOOD Thesis
The odds, written down before the outcome was known. The outcome is at the bottom.
Both findings published on this site say the signals do not predict. What is left, then, is not a signal. It is a discretionary position, taken small and deliberately, in a stock that has been watched for months rather than modelled: it went from the mid-eighties to the mid-hundred-and-teens, and rose 21.96% in the thirty days to 9 September 2026.
Previous trends are not indicators of future results, and the operator said so first. This is recorded here because a position whose odds are only published after the result is a story, not a record.
The position
- Instrument
- Call option
- Expiry
- 2026-10-16
- Days held
- 36
- Strike
- +13.5% OTM
- Premium
- $395.04
- Max loss
- The premium
- Break-even
- +17.0%
- Implied vol
- 64%
What has to happen
Implied volatility at 64% means the market has already priced a move of roughly this size over these thirty-six days. This is not a mispricing being collected. It is full freight, paid knowingly, to find out what the greeks do to a live position rather than to a diagram.
| Underlying | Move | Contract | Return |
|---|---|---|---|
| flat | 0.0% | −$395 | −100% |
| at the strike | +13.5% | −$395 | −100% |
| break-even | +17.0% | $0 | 0% |
| thesis rate | +19.2% | +$255 | +64% |
| — | +21.4% | +$505 | +128% |
| — | +30.1% | +$1,505 | +381% |
The second row is the one worth sitting with. The underlying can rise 13.5% — a good month by any measure — and the contract still expires at nothing. Being right about direction is not sufficient. Direction, magnitude and a date are the trade.
Why this is worth doing at all
Because an option is the only instrument that charges you rent for being slow, and no amount of reading conveys what that feels like on a position you own. Theta will take roughly twelve dollars a day out of this whether the stock moves or not, and on some day when the stock rises the contract will lose value anyway because implied volatility fell. Those two sentences are cheap to read and expensive to learn.
The premium is an education expense that may also pay. It is not a recommendation, not a signal, and not evidence of an edge — the two findings on this site say the opposite.
Placed and filled at $3.95. One contract, $395.04 all in, twenty minutes after the opening bell on a fresh quote. The limit was set at $4.20 as a ceiling and the market was better than the ceiling, so it filled twenty-five cents under it — and fifty-five cents under where the same contract closed the night before, because the underlying opened lower.
The odds moved while this was being arranged. Written down in advance the broker put the chance of any profit at 20.2%; at the moment of execution it printed 19.1%. Both numbers are kept here. The first is the one that was published before the outcome could be known, which is the only one that means anything; the second is what was actually bought.
Break-even is now $133.95. Theta takes roughly $11.50 a day out of the position whether the stock moves or not. Outcome recorded here either way.
Sold to close at $6.30. Held eleven of the thirty-six days. The underlying went from $113.33 at the fill to $125.02 on the morning it was sold, up about ten per cent, and the contract never reached its strike — the closest the stock came was $126.41, on the day it was sold. Every cent of the $630 was time value. Realised +$235 on $395.04, +59%.
The exit was untidy and is recorded as such. A limit to sell at $6.75 went in at 09:36 ET on a quote that had already slipped to $5.90 in the two minutes it took to review; it never filled, was cancelled at 12:20 ET, and after a $6.40 attempt failed the contract was sold by hand at $6.30. The 20.2% written down above was the chance of any profit at expiry. It was never tested: the position was closed twenty-five days early on a ten per cent move in the stock, which is the shape to expect from a bought call. The exit comes on the move, not on the date.
A second exercise, in a different name and sized differently, is written down here.