r/options
HOOD cash-secured put — here's my setup, sanity-check me?
Trader plans to sell HOOD cash-secured puts at $73 strike to capitalize on high IV (85), willing to own shares at $70 if assigned.
- High IV Rank (~85%) allows for significant premium collection relative to historical norms.
- The chosen strike price ($73) is below recent support levels, providing a technical safety buffer.
- Investor expresses genuine willingness to own the underlying asset at the breakeven price of ~$70.
- Upcoming earnings event introduces binary risk that could cause gaps beyond the breakeven point.
- HOOD is characterized as a higher-volatility name, implying larger potential drawdowns if the trend reverses.
Sharing a setup I'm eyeing and would appreciate a gut-check before I pull the trigger.
https://preview.redd.it/zcsvtc7wmk5h1.png?width=3360&format=png&auto=webp&s=7e4411dd04f7343d2c5f8449989d4b8b3ae0ce50
The name: HOOD (Robinhood), trading around $82.50. Mildly bullish trend, analysts lean Buy, and IV is rich right now (IV Rank \~85), which is what got my attention for selling premium.
The trade I'm considering:
- Sell the $73 put, expiring \~27 DTE
- Credit: \~$2.95 ($295 per contract)
- That's \~11.5% out of the money, breakeven \~$70.05
- Delta around 0.26, roughly 4% return on capital for the month
My thinking:
- Strike sits below the recent support area, so I've got a buffer if it pulls back.
- IV Rank in the 80s means I'm getting paid well vs. this stock's usual range.
- I'd be genuinely fine owning HOOD at \~$70 if assigned.
What I'm unsure about / risks:
- There's an earnings date to check around the expiry — I don't love holding a short put through a print, so I may shift the expiration to avoid it.
- It's a higher-volatility name, so the wide IV cuts both ways.
Questions for the group:
- Would you take the $73 strike, or go further out (more buffer, less premium)?
- Roll the expiration to dodge earnings, or just size smaller and hold through?
- Anything about HOOD specifically that would make you skip this?
Not advice, just sharing my process — appreciate any thoughts 🙏
I'd buy HOOD at $70. In fact I did, at $69, in March.
Worst comes to worst, you can Wheel, as I doubt it will ever go below $60.
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