This trade is the most honest lesson my cash-flow system has taught me.
On August 24, QUBT had stabilized near $9.5 after halving from $20. I sold 2x QUBT 18SEP26 $8 Puts at $0.49, collecting $98, and waited for the classic outcome: “collect premium” or “take assignment.”
Two weeks later, the script went off track: QUBT didn’t bounce — it slid all the way back to $8.
Now the stock is sitting right at my strike, with 7 days to expiry.
🎯 I. Entry: Why Sell, Why $8
The real fill on Monday, August 24:
| Item | Detail |
|---|---|
| Underlying | QUBT |
| Strategy | Cash Secured Put (CSP) |
| Sold | 2x QUBT 18SEP26 $8 Put @ $0.49 |
| Premium | $98.00 (net ≈ $96.50) |
| Collateral | $1,600 cash (cash-secured, no leverage) |
| Expiry | 2026-09-18 (25 days) |
Screening logic:
- Willing to own: I already hold 300 shares at an average of $9.66, and $8 was my add-on line. Selling a Put turns “waiting to buy” into “getting paid to wait.”
- Cushion: QUBT was ~$9.5 at entry, so the $8 strike left ~15% of buffer below.
- IV premium: post-crash volatility made the 8P worth $0.49 — over 10% annualized on 25 days. That’s the “panic tax” a seller should collect.
💡 Silent’s Note: Rookies see a stabilization and ask “should I buy the dip?” Hunters ask “are the options still expensive?” We sell panic premium — but only at strikes where we actually want to own the stock.
⚙️ II. The Playbook: Both Outcomes Acceptable
The script was written the moment I entered:
Scenario A (most likely): stock stays above $8, the puts expire worthless, $98 banked — 10%+ annualized.
Scenario B (unlikely): stock breaks $8 and I’m assigned at an effective cost of $8 - $0.49 = $7.51 for 200 shares — well below my current $9.66 average. A perfect add-on, then flip to Covered Calls.
Both scenarios were acceptable. That’s the whole point of CSP.
📊 III. Reality: The Stock Walked Right to $8
Scenario B — the “unlikely” one — is becoming reality.
- Sept 11 close: QUBT at $7.99, almost exactly at the $8 strike.
- My 8P: mark down to $0.26, with Delta expanding from about -0.25 at entry to -0.49 (at-the-money options carry max delta).
- And yet the position is still up about +$45. Why is a seller making money while the stock falls toward the strike?
The answer lives inside option pricing:
- Theta beat Delta: with 25 days decaying to 7, daily time-value erosion outpaced the intrinsic loss from the falling stock.
- IV deflated (Vega): as sector panic faded, the volatility premium shrank, offsetting the adverse move.
This is the counterintuitive core of selling premium: as long as the stock doesn’t blow through the strike, time is on your side.
🛡️ IV. The Decision Point (Live)
Seven days to expiry, QUBT hovering at $8. Three options on the table:
- Take assignment: let it expire in the money, own 200 shares at $7.51, flip to Covered Calls. This matches the original Scenario B.
- Close early: buy back now, locking ~$45 (46% of max profit) and hand the assignment suspense back to the market.
- Roll: if I expect $8 to break but don’t want shares, rolling to a lower/later strike exists — but it violates “only sell what you’re willing to own,” so I rarely use it.
My lean: Scenario B was the plan all along. QUBT at $7.51 is a stock I’d happily own, and 500 shares (300 + 200) would generate even bigger Covered Call cash flow. But if it breaks $8 in the final week and the slide accelerates, I’ll buy back before expiry — giving up some profit beats riding a falling knife.
📝 Hunter’s Summary
The real homework of a CSP isn’t at entry — it’s the moment the stock reaches your strike.
Everyone says “I’d be happy to take assignment” when selling a Put. But when the stock actually sits at the strike, fear starts talking: Will $8 hold? What if it goes to $6? Should I cut it?
A script written in advance exists precisely to fight that fear. I’ll update with the final outcome (premium kept or shares assigned) after expiry.
Related: The Wheel Strategy Explained — this is the Wheel’s first step, the Cash Secured Put, in live action.