Monday, September 14. Three headwinds stacked up, and NOK crashed 13.30% on the day to close at $9.65:
- An AI-infrastructure repricing: over the weekend, Anthropic CEO Dario Amodei called for slowing frontier AI development (endorsed by Altman and Musk), triggering a sector-wide de-rating of AI data-center names. NOK has been re-rated by the market as an “AI-infrastructure stock” (optical networks, IP routing, data-center switching) and was already down about 40% from its $17.45 June high — high-multiple momentum stocks are the most sensitive to exactly this kind of headline;
- The China exit confirmed: Nokia confirmed it would close nearly all of its mainland China operations by year-end — 1,600 layoffs at the Hangzhou R&D center, with Beijing, Chengdu, Qingdao and Shanghai sites also on the closure list. China revenue shrank from a €2.2B peak to €913M (after losing the 2020 5G tenders, the market was gradually taken over by Huawei and ZTE);
- The Modulate Space deal collapsed: a potential business combination with satellite-communications company Modulate Space fell apart, removing another piece of the growth story.
On a crash day, the loudest topic online is “how much pain the put sellers are in.” My portfolio has put legs hurting too. But the first thing I did that day was buy back two short calls — while others stared at the wound, I banked whatever cash was ready to bank.
1. The Ledger First
📒 Ledger detail (click to expand)
| Time (ET) | Contract | Side | Qty | Avg sell | Buyback | Cash out | Realized |
|---|---|---|---|---|---|---|---|
| 10:08 | NOK SEP 25 ‘26 12C | Buy to close | 10 | $0.179 | $0.06 | -$70.30 | +$108.70 |
| 10:10 | RGTI SEP 25 ‘26 18C | Buy to close | 2 | $0.453 | $0.155 | -$33.02 | +$57.58 |
| Total | -$103.32 | +$166.41 |
Realized total is the broker’s settlement figure, +$166.41; the per-leg sum is $166.28, a $0.13 difference from rounding of sell-side commissions.
The NOK 12C was built in two batches (the last 4 on 9/11 at $0.18), averaging $0.179; the RGTI 18C went on during the 9/8 quantum rally, averaging $0.453. Both were covered calls — the NOK 12C fully covered by 10 LEAPs (a diagonal spread), the RGTI 18C covered by 200 shares. No naked calls.
2. Why Buy Back Instead of Waiting for Expiry
The math is simple. NOK 12C: sold at an average of $0.179, bought back at $0.06 — 66% of max profit is already in hand, with only 33% of the premium left on the table (10 contracts ≈ $60). Same for the RGTI 18C: sold at $0.453, bought back at $0.155 — 66% banked, 34% left (2 contracts ≈ $31).
One question settles it: for that $91 sitting on the table, what am I willing to carry over the next 11 days?
- The FOMC meeting opens tomorrow. The market is pricing a 60-82% chance of a rate hike (the first since 2023), and the decision lands 9 days before the 9/25 expiry. Any directional shock brings OTM calls back to life.
- A -13% single-day move in NOK just happened. The 12C has a 24% buffer to the close, the RGTI 18C 17% — it looks thick, but in this volatility regime a thick buffer is one snap-back rally away.
- The buyback also frees margin — but only for the NOK 12C. The 12C is covered by 10 LEAPs (a diagonal), yet IBKR still charges maintenance margin on it at spread terms (about $200 per contract × 10 = $2,000), which the buyback releases. The RGTI 18C, by contrast, is a stock-covered call that ties up no extra option margin — buying it back leaves the shares and their margin untouched. The real margin hogs are the put legs, so this reason only deserves third place.
Profit-taking on short calls should not come from “waiting for expiry” — it comes from one comparison: is the premium left on the table worth the risk you keep carrying? With a third of the premium left and an FOMC ahead, there was nothing to think about.
3. RGTI: The Stock Is Losing, the Call Already Won
This one deserves its own section, because it shows the difference between single-leg thinking and portfolio thinking.
Look at the stock alone: 200 shares at a $17.86 cost against a $15.43 spot — an unrealized loss of about -$486. Ugly.
Now add the option leg: the 2x 18C sold on 9/8 collected roughly $92 in premium; today I bought them back at $0.155, banking +$58. While the stock was taking hits, the call leg was collecting. “You get paid even when the stock doesn’t rise” is the whole point of a Covered Call — and this fill was a textbook cash-in.
The same decline looks like tragedy leg by leg. Put the legs back into the portfolio and you see the hedge has been alive all along.
4. The Other Side of the Same Crash
This review is not going to show only the winning half.
The same day, my NOK 10.5P flipped from OTM to ITM — the put-selling legs were bleeding; the account’s total PnL for the day was -$720. The $166 I banked doesn’t mean “I won today.” It means it was the only money I proactively took off the table on a crash day — it can’t fill the hole the puts dug, but it proves something else: the two-sided nature of selling options is itself a hedge. The call legs realized their profit faster than usual precisely because they fed on this very decline.
Don’t play dead when losing, don’t brag when winning — that’s the only way the ledger stays trustworthy.
5. Three Takeaways
- Profit-taking comes from comparison, not from waiting. “Just let it expire for free” sounds free, but it is really re-exposing profit you already have to the market. The right questions come in threes: How much premium is left? What events are ahead? Do I need the margin? The answers decide between buyback and waiting.
- The first reaction on a crash day is not panic — it’s opening the ledger. Every leg reacts to a decline differently: stock down, puts hurting, calls accelerating toward max profit. Scan them once and you’ll know which action is with the wind. That day, buying back calls was the only one.
- Portfolio thinking is the only cure for single-leg fear. RGTI’s -$486 stock loss and +$58 call gain belong on the same row; so do NOK’s -$1,071 LEAP loss and +$109 12C gain. Leg by leg it’s all blood; as a portfolio it’s net equity.
A hunter doesn’t fear the storm. He fears not knowing, in the middle of it, which hand is collecting cash and which hand is bleeding. This time, I had a clear look at both.
Current state: NOK 12C×10 and RGTI 18C×2 fully bought back; remaining short calls are TRON 5C×17 (covered by 2,300 shares); remaining short puts are NOK 10.5P×4 + 10P×6 + QUBT 8P×2. Account leverage ≈ 1.56x, cash -$1,619.
Open items:
- NOK 10.5P (9/25) ×4 now ITM — buy back or manage to expiry; written decision by 9/23 at the latest
- NOK 10P (9/18) ×2 — the FOMC decision lands 2 days before expiry; buy back first
- QUBT 8P (9/18) ×2 — back OTM, close for about $48 to cut the assignment tail