October 6, US Eastern — a big-up day for Nokia. Two clicks, 32 minutes apart.
11:17: NOK Oct 9 $10 puts ×5 bought back at $0.04. 11:49: NOK Nov 20 $13 calls ×5 sold at $0.32.
One leg came from the second tier of the September 22 three-tier put sale — a residual down to 15%, and a $5,000 assignment obligation priced too cheap to keep carrying. The other is a brand-new lease: strike 13, expiry 11/20, straddling the October 22 earnings — the last piece of the lease board on 20 LEAPs.
From today, all 20 LEAPs are working. Every base unit is producing cash flow.
1. The Ledger First
📒 Ledger detail (click to expand)
Trade one: the second tier closes (buyback)
| Time (ET) | Contract | Action | Qty | Sold avg | Buyback | Gross | Net banked |
|---|---|---|---|---|---|---|---|
| 11:17 | NOK OCT 9 ‘26 10P | Buyback | 5 | $0.263 | $0.04 | +$111.50 | +$107.94 |
Basis: net banked per TWS settlement (all-in), same source as the October 1 buybacks. Residual at 15.2% ($0.04 ÷ $0.263); 82.1% of the $131.50 sold premium realized.
Trade two: a new lease at the 13 strike (sell-to-open)
| Time (ET) | Contract | Action | Qty | Sold | Net collected | Expiry | Parameters |
|---|---|---|---|---|---|---|---|
| 11:49 | NOK NOV 20 ‘26 13C | Sell-to-open | 5 | $0.32 | +$156.20 | 11/20 | Δ 0.245 · IV 65.6% · OTM +21% |
Both trades hit during the NYSE session: Nokia up over 5% on the day ($10.76 against a $10.20 prior close), the rally continuing to price the company’s AI-infrastructure narrative.
2. Trade One: The Comparison at a 15% Residual
Three lease signboards went up on September 22 — the first (OCT 2) redeemed last Thursday, the second (OCT 9) taken down today, the third (9.5P) still on the wall waiting for earnings (handling window 10/16–21).
Why now? Three reasons, all pointing the same way:
- The residual comparison came due again. 0.263 → 0.04: the entire remaining potential is $20 (500 shares × $0.04). A seller realizes profit not by “waiting it out,” but through one comparison: is the residual still worth the risk budget it occupies? Two weeks ago this was a $131 business; today it’s $20 of loose change.
- The rally pushed the answer even further away. NOK up over 5% puts the $10 strike 7% below spot — the leg is now safe enough to be boring, which means its story is finished: the full theta rent has been collected; the last three days hold only pocket change.
- The account is in reduce-only mode. $5,000 of assignment obligation (500 shares × $10) came back off the table, and the maintenance-margin reading eased from 67.9% pre-market to 52.7% midday. Under the “unfreeze only below 50%” rule, every leg retired is a step toward thaw.
3. Trade Two: Why Sell Calls Into a Rally
Selling calls on a big-up day is a rare but comfortable posture for a seller:
- IV up = rent up. The 13C went out at roughly 66% implied vol — a big-up day’s premium contains the market’s full mood premium. That is what the seller is paid for.
- The strike can sit higher. The new leg lifts the short-call strike ladder from 12 / 12.5 to 13 — the first rung above the breakeven line (LEAP strike $10 + net cost $2.82 ≈ $12.82). NOK must gain 21% to touch it, with the October 22 earnings sitting in between.
- The final five complete the board. Of 20 LEAPs, 15 were already leased (12C×5 + 12.5C×10). This trade put the last 5 units of capacity on the wall — 20 short calls against 20 LEAPs, fully leased. From today, new short calls are frozen: beyond full coverage, anything added is naked. That line is not a slogan; it is the discipline.
45 days for $156.20, roughly 20% annualized — unspectacular, but it is incremental rent on base units that were already paid for.
4. The Board: Fully Leased
The full Nokia structure now reads:
| Leg | Expiry | Qty | Role |
|---|---|---|---|
| LEAP 10C JUN ‘27 | 2027-06 | +20 | Base (cost $2.816) |
| 12C OCT 23 | 10/23 | -5 | Collecting rent |
| 12.5C OCT 23 | 10/23 | -10 | Collecting rent |
| 13C NOV 20 | 11/20 | -5 | 🆕 This entry |
| 9.5P OCT 23 | 10/23 | -5 | Last put tier, handle before earnings |
The calendar items that require attendance:
- 10/16–21: pre-earnings handling window — review the 9.5P together with the fifteen 10/23 short calls;
- 10/22: Q3 earnings (pre-market);
- 11/20: 13C expiry — if the tape hasn’t taken it away, another $156 settlement day.
Account level: cash $2,832, leverage 0.85x, maintenance margin 52.7% — still above the 50% thaw line. Right direction; the discipline continues.
A seller’s log rarely has dramatic entries. More often it looks like this: late night, one old lease down to a 15% residual, redeemed; the same day, a new lease goes up — the price was handed over by the rally, the strike was chosen by discipline.
Three signboards went up on September 22: the second comes down today, the first already came down last week, the third waits in the wind for its earnings. And on the other side of the book, all 20 units are now on shift — as of today, not one of the 20 LEAPs is idle.
Trade journal · part of the NOK short-leg management series with the three-tier put sale, the 11C buyback, and the NFP-night double buyback.