August 15 Options Crunch: When Three Trades Go South (and One Saves the Day)

 Setting the Stage

I went into early August feeling confident.

Selling premium. Collecting credits. Playing the probabilities.

But as we approach August 15, I’m looking at three short calls that are underwater — and one that’s actually holding the line.

It’s a perfect case study in why expiration clustering can be dangerous, how quickly losses can pile up, and why one good trade can soften the blow.

MSTX – The Quick Theta Play That Backfired

I sold this call just two days before the rally. Thought it would be an easy win on a quiet biotech name.

Then MSTX jumped above my breakeven almost immediately. Now I’m nursing a 42% loss in under a week.

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SMCX – The Slow Burn That Exploded

This one’s been creeping up for weeks, but I kept telling myself “it’ll roll over.”

It didn’t.

Now the short call has more than doubled in price. I’m down $505 — a 117% loss on the risked capital — and today alone it cost me $270.

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CHYM – The “Safe” One That’s Not So Safe

From my earlier post, CHYM was meant to be a calm, out-of-the-money play.

But with the stock just $0.05 below breakeven, any small move could flip me negative fast.

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CONL – The Lone Bright Spot 🌟

Finally, some good news.

This short call is working exactly as planned — time decay is doing the heavy lifting, and the stock is staying well away from trouble.

Up $38 (33.63%) so far, and if it keeps this pace, I’ll likely take profits early to avoid any last-minute gamma surprises.

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🧠 What Went Wrong (and Right)

Mistakes:

1. Overconcentration on one expiration date – All four trades end on 8/15. One bad week hits all positions.

2. No hard exit rules – I didn’t set P/L alerts to automatically cut losers.

3. Underestimating volatility – MSTX and SMCX both moved more than expected without major news.

What Worked with CONL:

• Entered early enough for theta to accrue.

• Avoided a volatile name or earnings risk.

• Stayed disciplined and didn’t over-size.

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🔧 Damage Control Plan

• MSTX: Buy back if it breaches $35.50.

• SMCX: Roll or close if it pulls back to $8.00.

• CHYM: Close if I can scratch the trade for break-even.

• CONL: Take profits at 50–60% of max credit.

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💡 Lessons for Future Me (and You)

• Never stack too many trades on the same expiry.

• Set automated exit rules — don’t leave it to willpower.

• Respect sector volatility — biotech and small-caps can run on whispers.

• Size small enough that one loss doesn’t wreck the month.

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Final Thought:

Selling options is like running an insurance business.

Most months, you collect the premiums. Some months, you pay out.

The trick is making sure the payouts never exceed what you can recover from — and remembering that one smart trade can still keep you afloat when the rest are sinking.