Weekly Options Review: NVAX, RUM & TLRY Covered Calls and Cash-Secured Puts

Introduction to the Weekly Options Review Process

Managing options positions across multiple stocks and brokerages requires a disciplined, systematic approach to tracking cost basis, identifying opportunities, and executing trades. This weekly review walks through the complete process of analyzing positions in Novavax (NVAX), Rumble (RUM), and Tilray (TLRY) using both Robinhood and ThinkOrSwim platforms.

The weekly review process is essential for option sellers who practice the wheel strategy or continuous bilateral trading. By systematically reviewing each position, checking cost basis, identifying expired contracts, and placing new orders for both covered calls and cash-secured puts, traders maintain consistent premium income while managing risk.

This article demonstrates the real-world challenges option sellers face when managing multiple positions, including low premium environments, wide bid-ask spreads, significant price drops, and the decision-making process for selecting strike prices and expiration dates.

NVAX Position Analysis: Navigating a Significant Price Drop

Understanding the Cost Basis Situation

At the time of this review, NVAX presented one of the most challenging scenarios for option sellers: a stock that experienced a significant price decline following negative news. The last price traded at $11, representing a drop of approximately $6-7 from previous levels after unfavorable news release during Thursday's after-hours trading session.

The good news was that a cash-secured put at the $16.50 strike had been assigned, which helped reduce the overall cost basis from $28 down to $25. This demonstrates one of the key benefits of the wheel strategy—when puts are assigned during price declines, they effectively dollar-cost average the position lower, improving the overall cost structure.

Cost Basis Management During Price Declines: When a stock drops significantly below your cost basis, assignment of cash-secured puts actually becomes advantageous. While it increases your share count, it simultaneously lowers your average cost per share, bringing your breakeven point closer to current market prices. This is exactly what happened with NVAX when the $16.50 put was assigned, reducing the cost basis from $28 to $25.

The Challenge of Low Premium Environment

With NVAX trading at $11 against a cost basis of approximately $25.50, the covered call options were providing virtually no premium. Strike prices at or above the $25 cost basis were showing zero premium for near-term expiration dates. This created a difficult decision: accept minimal premium on short-term contracts or extend duration significantly to capture meaningful premium.

The analysis revealed two primary options:

January 20, 2023 expiration at $25 strike: Offering only $0.04 premium (approximately one month out)
July 21, 2023 expiration at $25 strike: Offering $1.21 premium (approximately seven months out)

Making Strategic Decisions About Contract Duration

The decision between short-term and long-term covered calls involves multiple considerations beyond just the premium amount. While the July contract offered significantly more premium ($121 per contract versus $4), it also locked up the shares for seven months and would be expensive to buy back if adjustments were needed.

Strategic Flexibility vs. Premium Collection: The choice was made to sell the January 20, 2023 expiration at $0.04 despite the minimal premium. The rationale was strategic flexibility—a one-month contract maintains the ability to sell additional cash-secured puts during that period, continue collecting premium on the put side, and easily adjust the covered call position as the stock price changes. If the stock continues declining and more puts are assigned, the cost basis will drop further, allowing covered calls to be written at lower strikes that offer better premium.

Managing Multiple Accounts and Share Lots

With 300 shares held in Robinhood and 100 shares in Ameritrade (ThinkOrSwim), the position required coordination across both platforms. The execution plan involved:

Selling one $25 covered call contract in ThinkOrSwim (covering 100 shares) at $0.04
Selling three $25 covered call contracts in Robinhood (covering 300 shares) at $0.04
Placing a cash-secured put at $11 strike to continue collecting premium on the downside

Playing Both Sides: The Cash-Secured Put Strategy

Despite the challenges on the covered call side, the cash-secured put presented a reasonable opportunity. With the stock trading around $11, selling an at-the-money put at the $11 strike offered approximately $0.90 in premium with a relatively narrow bid-ask spread of $0.08.

If this put were to be assigned, it would further reduce the cost basis dramatically. The willingness to accept assignment at $11 reflects confidence that:

The company is unlikely to go to zero (bankruptcy scenario)
Continued premium collection on puts will keep reducing cost basis
Eventually, either the stock will recover or enough premium will be collected to reach breakeven

RUM Position Management: Dealing with Partial Coverage

Tracking Existing Covered Call Positions

The Rumble (RUM) position demonstrated a more complex scenario with 500 total shares but only 200 shares already covered by existing call contracts that didn't expire until the following Friday. This left 300 shares available for writing new covered calls.

The position's cost basis structure revealed shares purchased at different price points:

100 shares at $8.59
200 shares at $10.00
Additional shares at $13.00

This created a blended average cost basis of $10.70, which became the target strike price for new covered calls if consolidating at a single strike.

The Multi-Strike vs. Consolidated Strike Debate

Previous weeks had involved selling covered calls at different strike prices corresponding to the different purchase prices (separate strikes at $8.50, $9.00, $10.00, etc.). While this strategy can bring in additional premium by optimizing each lot, it also creates complexity in tracking and management.

Simplification vs. Optimization: The review revealed the ongoing tension between maximizing premium through multi-strike strategies and simplifying position management by consolidating at a single strike price. For stocks with shares purchased at significantly different prices, writing calls at different strikes can capture additional extrinsic value, but it requires more careful tracking and creates multiple expiration and assignment scenarios to manage.

Examining Premium Availability

With RUM trading at $7.67-$7.78 and a target strike of $11 (above the $10.70 cost basis), the premium situation was equally challenging as NVAX. Near-term weekly expirations at the $11 strike were showing zero premium, and even multiple weeks out provided minimal compensation.

Only at the January expiration (approximately one month out) did the $11 strike finally show $0.05 in premium. This presented a similar dilemma: accept minimal premium on monthly contracts or hold off and reconsider the multi-strike approach at lower price points where more premium exists.

Strategic Decision: Hold and Reassess

Rather than forcing trades with minimal premium, the decision was made to temporarily hold off on writing additional RUM covered calls and revisit the analysis later. This approach acknowledges that not every position requires immediate action every week—sometimes the best decision is to wait for better opportunities.

However, the put side still offered opportunity. A cash-secured put at $7.50 was showing $0.20-$0.25 premium with the stock trading around $7.67-$7.78. This provided a reasonable risk-reward profile for continuing to collect premium.

RUM Cash-Secured Put Analysis: Selling the $7.50 put at $0.20 provided income while accepting the possibility of assignment. If assigned, it would add more shares at $7.50 (minus the $0.20 premium collected), which is below the current trading price and well below the $10.70 cost basis. This continues the dollar-cost averaging strategy while generating cash flow.

Long-Term Outlook for Low Premium Stocks

The RUM analysis raised the important question of when to continue holding positions in stocks that have diminished premium. The original appeal of RUM was likely higher premium when it first came to market, before the trading range stabilized and implied volatility decreased.

The strategic plan became: continue playing both sides (calls above cost basis when possible, puts below current price) while looking for an eventual exit opportunity when the position reaches profitability or the premium environment improves.

TLRY Position: The Ideal Options Trading Stock

Why Tilray Represents an Excellent Option-Selling Vehicle

In contrast to the challenges presented by NVAX and RUM, Tilray (TLRY) demonstrated the characteristics that make a stock ideal for consistent option premium collection:

High option volume: Thousands of contracts traded regularly, ensuring liquidity
Narrow bid-ask spreads: Only $0.01 difference between bid and ask prices
Premium at multiple strikes: Even 2-3 strikes out-of-the-money showing meaningful premium
Lower absolute price: Trading at $3.26 makes it accessible for smaller accounts
Weekly options available: Provides flexibility for short-duration strategies

The Importance of Liquidity and Volume: TLRY's high option trading volume creates tight bid-ask spreads, which is critical for option sellers. When the spread is only $0.01 (as opposed to $0.08-$0.19 on NVAX and RUM), it means significantly less slippage when entering and exiting positions. If you need to buy back a contract to roll or close a position, you're only giving up approximately one penny per share instead of eight or nineteen cents—a substantial difference when executing frequent trades.

The Cost Basis and Strike Selection Process

With a cost basis of $3.96 and the stock trading at $3.26, the position was underwater but still generating premium. The cost basis indicated a target strike price of $4.00 for covered calls. Despite being nearly $0.75 out-of-the-money (two full strike prices above current price), the $4.00 strike was still offering $0.07 premium for the current week.

This premium availability at strikes well above the current price is exactly what makes TLRY attractive. The stock's average weekly move of $0.42 suggested that selling calls at $4.00 provided reasonable safety from assignment while still collecting meaningful premium.

Executing the Covered Call Trade

With 200 shares held in the ThinkOrSwim account, the execution involved selling two covered call contracts at the $4.00 strike for $0.07 premium. The tight $0.07-$0.08 bid-ask spread allowed for confident execution at the asking price of $0.07.

This trade generated $14 in premium ($0.07 × 200 shares), which may seem small but represents consistent weekly cash flow. Annualized, weekly premiums of $0.07 on a $3.26 stock can add up to meaningful returns, especially when combined with premium from the put side.

The Cash-Secured Put Opportunity

Unfortunately, at the time of the review, the account had limited buying power ($227 available, needing at least $300 for a cash-secured put). However, the analysis looked ahead to the next day when additional funds would settle, allowing for a put trade.

The plan was to sell a cash-secured put at the $3.00 strike, which would offer approximately $0.10 in premium. At $2.00, the premium dropped off significantly with no bids present, confirming that $3.00 was the appropriate strike for balancing premium collection with assignment risk.

TLRY Bilateral Trading Strategy: By selling covered calls at $4.00 (above cost basis) and cash-secured puts at $3.00 (below current price), this position would be generating premium on both sides. If the puts are assigned, it brings the cost basis lower (more dollar-cost averaging). If the calls are assigned, it exits the position at a profit above the $3.96 cost basis. Either outcome is acceptable while collecting weekly premiums.

Key Lessons from TLRY

The TLRY position demonstrates several important principles for selecting stocks for option selling strategies:

Volume matters more than price: A $3 stock with high option volume is better than a $100 stock with limited liquidity
Tight spreads preserve capital: Every $0.01 in bid-ask spread affects profitability on both entry and exit
Out-of-the-money premium indicates opportunity: When strikes 2-3 price levels away still have premium, there's room to be strategic
Weekly options provide flexibility: Short-duration contracts allow for frequent adjustments and premium collection

Platform Comparison: ThinkOrSwim vs. Robinhood

When to Use Each Platform

Throughout this weekly review, both ThinkOrSwim and Robinhood were utilized, each offering different advantages for specific tasks:

ThinkOrSwim Advantages:

Superior ability to jump far out in time (easily view expirations months in the future)
Advanced filtering options (can filter to specific strike prices quickly)
More detailed option chain data and analytics
Better for analyzing multiple expiration dates simultaneously
Professional-grade platform for serious option traders

Robinhood Advantages:

Simpler, more intuitive interface for quick trade execution
Easier to replicate trades across multiple contracts
Mobile-friendly for on-the-go trading
Streamlined for common option strategies

Using the Right Tool for the Job: The workflow demonstrated jumping to ThinkOrSwim specifically when needing to explore far-dated expirations (like the July 2023 NVAX calls) because Robinhood makes it more cumbersome to navigate months ahead. Once the desired contract was identified in ThinkOrSwim, the same trade could be executed in Robinhood to cover the larger share position. This multi-platform approach leverages the strengths of each tool.

The Critical Role of Cost Basis Tracking

Why Accurate Cost Basis Is Essential

Throughout this weekly review, every single trading decision started with checking the current cost basis in the tracking application. This wasn't coincidental—knowing your exact cost basis is fundamental to making intelligent decisions about strike price selection, premium collection, and overall position management.

For NVAX, knowing the cost basis was $25 (after factoring in the assigned put and all premium collected) made it immediately clear that selling calls below $25 would potentially lock in a loss. For RUM, the $10.70 blended cost basis indicated where calls needed to be written to ensure profitability on assignment. For TLRY, the $3.96 cost basis showed exactly what strike price to target.

How Premium Collection Affects Cost Basis

One of the most important concepts demonstrated throughout this review is understanding how premium collection continuously reduces your cost basis:

Every covered call premium collected reduces the net cost of your shares
Every cash-secured put premium collected either reduces future purchase price (if assigned) or is pure profit (if expires worthless)
Over multiple weeks and months, these premiums compound to substantially lower your cost basis

Cost Basis Evolution Example: NVAX started with a cost basis of $28 but was reduced to $25 when a $16.50 put was assigned. If the $11 put discussed in this review were also to be assigned, it would add more shares at $11 (minus the $0.90 premium collected), further reducing the average cost per share. Meanwhile, every $0.04 collected from covered calls also chips away at the cost basis. This continuous reduction is what eventually brings positions back to profitability even when stocks decline significantly.

The Challenge of Multi-Account Tracking

Managing positions across multiple brokerages (ThinkOrSwim and Robinhood in this case) adds complexity to cost basis tracking. Brokerage platforms typically show cost basis only for shares in that specific account, not your blended cost basis across all accounts.

This is where dedicated tracking tools become essential. A platform that aggregates all your positions, all premium collected, all assignments, and all dividends across multiple brokerages provides the true cost basis needed for decision-making. Without this consolidated view, it's nearly impossible to know whether selling a covered call at a particular strike will be profitable or not.

Strategic Considerations for Weekly Reviews

Not Every Position Requires Action Every Week

One of the key lessons from this review is that disciplined option selling doesn't mean forcing trades when conditions aren't favorable. The decision to hold off on additional RUM covered calls demonstrated strategic patience—sometimes the best action is no action until the premium environment improves.

Weekly reviews should focus on:

Identifying which contracts expired (worthless or assigned)
Determining which positions have uncovered shares
Evaluating premium availability at your target strikes
Making conscious decisions about whether current premium justifies placing new orders

Balancing Flexibility with Income Generation

The NVAX covered call decision exemplified the ongoing balance between collecting maximum premium and maintaining strategic flexibility. While the July 2023 expiration offered $1.21 versus just $0.04 for January, the shorter duration contract provided:

Ability to continue selling cash-secured puts without excessive share accumulation
Option to adjust strike prices as cost basis changes from additional assignments
Minimal cost to buy back if needed for position management
More frequent opportunities to reassess and optimize

The Math on Extended Duration: While it's tempting to calculate whether multiple short-term contracts will exceed one long-term contract's premium, remember that conditions change. A stock trading at $11 today with $0.04 weekly premium might be at $15 in six weeks with $0.30 weekly premium available. Locking in seven months of premium today eliminates the ability to capitalize on improved conditions. The flexibility to adapt is often worth more than the incremental premium difference.

Playing Both Sides Whenever Possible

The consistent theme throughout all three positions was the intention to sell both covered calls (above cost basis) and cash-secured puts (below current price). This bilateral approach provides several advantages:

Continuous income: Premium collected regardless of direction
Dollar-cost averaging: Put assignments reduce cost basis
Profitable exits: Call assignments lock in gains
Neutral bias: Making money whether stocks go up, down, or sideways

The only limitation is capital availability (as demonstrated with TLRY where buying power was insufficient for the put trade temporarily). Maintaining adequate cash reserves to continue selling puts is essential for executing this strategy consistently.

How MyATMM Simplifies the Weekly Review Process

As demonstrated throughout this detailed weekly review, managing multiple option positions across different brokerages involves constant reference to cost basis data, tracking of expired contracts, and calculation of how premium impacts your overall position. This is exactly where MyATMM provides critical value for option sellers.

Consolidated Cost Basis Tracking

Rather than jumping between brokerages and trying to mentally calculate your blended cost basis across accounts, MyATMM provides a single source of truth. Whether you have NVAX shares in three different accounts or RUM shares purchased at five different prices, the platform shows your true average cost basis instantly.

Premium Impact Visualization

Every premium collected from covered calls and cash-secured puts automatically factors into your cost basis calculation. You don't need to manually track "$0.04 from this call, $0.90 from that put, $0.20 from another put" and calculate how it affects your average cost. MyATMM does this automatically, showing you exactly where you stand before placing your next trade.

Assignment Tracking

When puts are assigned (like the $16.50 NVAX put mentioned in this review), tracking how that changes your share count, average cost, and overall position can be complex—especially across multiple assignments at different prices. MyATMM tracks every assignment, maintaining complete accuracy in your position history.

The Weekly Review Made Simple: Instead of spending time calculating cost basis and tracking premium history, MyATMM users can focus on what matters—analyzing current market conditions, identifying the best strikes to sell, and executing trades. The platform handles the bookkeeping automatically, ensuring you always know your exact cost basis and can make informed decisions about strike selection.

Getting Started with MyATMM

MyATMM offers a free account that allows you to track up to 3 tickers forever—perfect for getting started with systematic option selling and experiencing how proper tracking transforms your decision-making process. For traders managing more positions, unlimited ticker tracking is available for just $4.95 per month.

Whether you're trading NVAX, RUM, TLRY, or dozens of other positions across multiple brokerages, MyATMM provides the accurate cost basis tracking that makes weekly reviews efficient and trading decisions confident.

Important Risk Disclaimer

Options trading involves substantial risk and is not suitable for all investors. The strategies discussed in this article, including covered calls, cash-secured puts, and the wheel strategy, can result in significant losses. Stock prices can decline to zero, and options can expire worthless, resulting in 100% loss of premium paid or obligation to purchase shares at prices above market value.

Past performance does not guarantee future results. The specific trades and outcomes discussed (NVAX, RUM, TLRY positions) are for educational purposes only and should not be considered recommendations to buy or sell any security. Market conditions, implied volatility, and stock prices change constantly, affecting option premiums and risk profiles.

Before engaging in options trading, ensure you understand the risks involved, have adequate capital to withstand losses, and have consulted with a qualified financial advisor regarding your specific situation. Never trade with money you cannot afford to lose.