Episode 440 Option trading podcast August 14, 2026

Welcome to the Weekly Option, the podcast for people interested in trading stock options. Each week we cover trade ideas and opportunities in the stock market right now. Whether you're a beginner, a professional, or just curious about options, this is the show for you. Let's get started. Welcome to the Weekly Option. This is episode 440 on August 14, 2026. I'm your host Eric and in this week's show, we will cover the trades from last week on Hertz Global Holdings, the Direction Daily MSCI South Korea Bull 3X ETF, SoundHound AI, and Undesync. And we discuss four new trades on AMC Entertainment Holdings, New Era Energy, and Digital Ink, Clean Spark Ink, and Applied Digital Corporation. Now, it's always great to hear from listeners. If you have any questions about the trade presented here on the show or even about your own positions, feel free to email me. If you can email questions to [email protected], that's [email protected]. I've also created a few videos to teach you all the basics of option trading that you'll need to know to be able to follow along with me on this show. You can visit our website and click on the videos tab to watch them or visit the YouTube channel for the weekly option. Now the markets finish the week with very little change. The Dow Jones Industrial Average lost 304 points, closing at 53,732 points. The S&P 500 index inched 28 points higher, ending the week at 7,785 points. And now it's time for the topic of the week. The topic of the week, this week, is running out of time, a common theme. Have you ever been right but wrong at the same time? I sometimes will trade zero DTE options, which means they expire the day of. And my trading style uses momentum changes to define my entry and exit points for trading. And I like using options that expire that same day because they tend to make the biggest moves for my trading style. But I definitely have been both right and wrong at the same time, meaning I was right on the direction, but I still lost money on the option. Sometimes you can just run out of time. What does that mean? Time until expiration is built into the price of every option. And when you buy an option, that time value is constantly working against you. If the market literally doesn't move at all, the option you bought would be worth less an hour or a day after you traded it. Sometimes the underlying market will go in the direction I want, but not move enough at the right time to allow me to make the profit that I want it. With every minute that passes, time value is being removed from those options. It's like it evaporates. And the longer the option stays out of the money, the more likely it will expire out of the money. I might start getting the move I anticipated, then literally run out of time. Or the market moves to the price you anticipated, but you hardly make a profit because the time value just evaporated from the position during the course of the move. It just took too long. Time always is the factor in option trading. Do what you can to make sure your positions don't run out of time. Now one way to combat this pressure is to trade spreads rather than individual options. That way the time value loss from the option you own is somewhat offset by the time value and the option that you sold. Time value is noted by the risk metric theta. So keep an eye on your theta as you're trading so that you know how changes in time are affecting your overall position. So that's it for the topic of the week. Let's go ahead and get into the review of last week's trades. We're going to start off with our covered call on Hertz global holdings, symbol Hs in hotel, T as in tango, Z as in Zulu. At the time the stock was trading for $2.26 per share, I looked at buying stock and selling the August 2.5 call at $0.29 hoping for a return of 23.45 in two weeks. Well shares have hurt lost $0.03 in the week at $0.23 per share. The call option we sold lost $0.21 leaving us with the profit of $0.18 if we were to close the trade out immediately. So with one week left until expiration, the main question is whether or not you want to keep the stock or close the trade. The weekly profit you would make by closing the trade early is only a third of what you would make if it went in the money. As well, you can let the option expire totally out of the money and then sell another call option in September. This would increase the total return on the trade, but it does keep you in the position longer. It all comes down to personal preference at this point. Still the stock price is above the break even price so we are making money on this trade so far. No adjustments are required at this point. Next up we have the cash secured put on the direction daily MSCI South Korea bull 3x ETF symbol K is in kilo. O is an Oscar or is in Romeo, U is in uniform. At the time the stock was trading for $17.36 per share, I looked at selling the August 17 put at $1.90 that could give us an 11.18% return on capital in two weeks. Well shares of the stock jumped $4.26 ending the week at $21.62 per share. The out of the money put that we sold is still really out of the money now. The put can be bought back for 30 cents, allowing for an immediate profit of $1.60 or $160. Or you can hold the option another week hoping the stock remains above $17.00 per share so that the put expires fully out of the money. This trade also has worked out as planned. No adjustments or need it, just matter of figuring out if you want to hold the put until expiration or go ahead and take the money off the table. Actually have the credit spread on SoundHound AI, symbol S's in Sierra, O is an Oscar, U is in uniform in as in November. At the time the stock was trading for $8.00 per share, I looked at selling the August 8 7.5 put spread at 19 cents, giving us a maximum possible loss of 31 cents per spread. Well shares of SoundHound lost 57 cents ending the week at $7.43 per share. The add of the money put spread that we sold is now in the money. The stock price is also below the break even price, so you have a few decisions to make. The first thing we would normally do is create an iron condor by selling a higher strike call spread. With one week left until expiration, those spreads are not capturing much value so it really won't have the position much. You could sell the 7.5/8 call spread at 14 cents. That would mean that you sold the 7.5/8 box at 33 cents. That locks in a 17 cent loss which is a little more than half of our 31 cent maximum loss from the start of the trade. That does at least lower your loss but it locks it in when you do that. You could also roll the trade to another month to reduce the loss. For instance you could buy the spread back for roughly 38 cents and then sell the September 7.6 put spread at 60 cents. That keeps you in a position longer and at least allows you to move the spread to the next month so that maybe you have a chance to actually make money on it this time since this one is moving against you with just a few days left until expiration. And finally of course you can do nothing and see how the stock moves this week. The maximum loss was known at the start of the trade and you can always chalk this one up as a loss and keep it moving. So it's totally up to you. You can make a move, you can roll it, you can do all sorts of things. So much of this risk management and trade management just comes down to individual personality and choice. And our final trade from last week is a debit spread on Undis ink symbol O is an Oscar in as in November D is in Delta S is in Sierra. At the time the stock was trading for $9.11 per share I looked at buying the August 8 half 9 call spread for 33 cents that give us a maximum gain of 17 cents or that's a 51.52 percent return in two weeks. Well shares of Undis grew 11 cents ending the week at $9.22 per share. The end of the money call spread that we bought is still in the money. The stock price is above our break even price meaning we are making money on this trade. Now I'll keep an eye out for any adverse stock moves over the next week. So far so good no adjustments are needed on this one. So that's it for the review of last week's trades. We are one week away from August expiration on August the 21st. It's funny as an option trader I tend to like live my life options expiration by options expiration kind of funny. Now all new trades on today's show will use the September 18th expiration date for monthly options in September. So let's get it right now. Let's dive in. We're going to start off with our covered call on AMC entertainment holdings symbol A is in alpha, Amazon Mike, C is in Charlie. The stock end of the week at $2.49 per share I'm looking at buying that stock and selling the subject. September 2.5 at 25 cents. That can give us a return of 10.44% in five weeks. Well, you enter this trade by buying stock for $2.49 and selling the September 2.5 call at 25 cents. This trade makes the most money of stock prices finished above $2.50 per share. The break-even price on the trade is $2.24 per share. In real terms, the stock purchase will require $249 and you would collect $25 for selling the option. Next up, we have a cash-secured put on new era, energy and digital ink. Symbol N is in November. U is in uniform. A is in alpha. I is in India. The stock end at the week at $5.06 per share. I'm looking at selling the September 5 put at $0.90. That can give us a return of 18% on capital. And you enter this trade by selling the September 5 put at $0.90. This trade makes the most money of stock prices finished above $5 per share. The break-even price is $4.10 per share. In real terms, you'll collect $90 for selling the put option and you'll have $500 locked up in case you need to purchase the stock. Next, we have our credit spread on clean spark ink. Symbol C is in Charlie, L is in Lima, S is in Sierra, K is in Kilo. The stock end at the week at $12.08 per share. I'm looking at selling the 12.11 put spread at 41 cents. That can give us a maximum possible loss of 59 cents per spread. Now you enter this trade by selling the September 12 put at $1.09 and concurrently buying the September 11 put for 68 cents. This trade is a credit spread because we are selling the spread and this trade makes the most money of stock prices expire above $12 per share. The break-even price on this trade is $11.59 per share. In real terms, you'll receive $41 per spread that you sell and have $59 at risk. And our final trade on today's show is going to be a debit spread on applied digital corporation. Symbol A is in alpha, P is in poppa, L is in Lima, D is in delta. Stock price into the week at $31.20 per share. I'm looking at buying the September 30 31 call spread for 65 cents. That can give us a maximum gain of 35 cents or that would be a 53.85% return in five weeks. Now you enter this trade by buying the September 30 call for $3.90 and concurrently selling the September 31 call at $3.25. This is a debit spread because we are buying the spread and this trade makes the most money of stock prices expire above $31 per share. The break-even price on this trade is $30.65 per share. In real terms, you'll pay $65 to enter the spread and your maximum gain is $35 per spread. So that's it for this week's show. Thank you guys so much for following. Thank you for listening. Hey, if you've never written a review of this podcast and you enjoy it, only if you enjoy it, leave me a great review. I have several five store reviews out there. I love to get another one. And if you're listening or watching this on YouTube, definitely hit the like button and subscribe to the show just so that you get it again next week. So thanks for listening. Thanks for sharing. I hope you guys have a great weekend and as always, happy trading. Thank you for listening to the weekly option podcast. Please subscribe to our show and visit us at www.thewikl.com for our full disclaimer. Visit our website at www.thewikl.com.