I bought 100 shares of ARM Holdings at $262.40 on September 8.
Eight days later, I still own all 100 shares, but I have already completed two profitable covered-call cycles against them and realized a combined $1,157 in option income.
That works out to $11.57 per share in realized premium and has reduced what I call my economic basis from $262.40 to approximately $250.83 per share.
I didn't accomplish this by predicting exactly where ARM would trade. I didn't day-trade the shares, and I didn't use naked calls.
Instead, I used the same 100 shares twice.
That is the part of this ARM trade that I find most interesting.
Here is exactly how the campaign developed, what the numbers look like, and what I've learned from the first eight days.
Starting With 100 ARM Shares
My ARM campaign began on September 8, 2026, when I purchased:
100 ARM shares × $262.40 = $26,240
That gave me enough shares to sell one standard covered-call contract.
My starting position was therefore straightforward:
| ARM Campaign | Amount |
|---|
| Shares purchased | 100 |
| Purchase price | $262.40 |
| Initial investment | $26,240 |
| Initial economic basis | $262.40/share |
Buying the shares was only the first part of my plan.
I wanted the shares to generate cash flow.
That's where the covered calls came in.
Covered Call #1: $639 Realized
After establishing the ARM position, I sold my first covered call against the shares.
The strike was:
$265
That strike was slightly above my $262.40 purchase price.
The first covered-call cycle was closed on September 11.
My realized profit:
+$639
This was important for two reasons.
First, I had generated meaningful cash flow from shares that I continued to own.
Second, closing the call freed the same 100 shares to potentially generate another round of premium.
Instead of thinking of the first $639 as the end of the trade, I viewed it as the completion of Cycle #1.
The underlying asset was still sitting in my account.
So I put it back to work.
Covered Call #2: Using the Same Shares Again
On September 11, after closing the first covered call, I sold another:
ARM $265 Call expiring September 18
I received:
$5.72 per share
Since one option contract represents 100 shares:
$5.72 × 100 = $572
That was $572 of new option premium credited to the account.
But receiving $572 doesn't mean I had made $572.
That's an important distinction.
The trade was still open.
I had an obligation attached to those 100 shares, and the value of the option could move substantially before expiration.
I therefore don't count the entire initial credit as realized profit until I know what it costs me to close the position—or until the contract expires or is otherwise resolved.
Five Days Later, the Call Was Worth Just $0.54
By September 16, the option I had sold for $5.72 could be repurchased for approximately:
$0.54
So I bought it back.
The economics were:
Premium received: $572
Cost to close: $54
Net realized profit: $518
Therefore:
Covered Call Cycle #2 = +$518
I didn't wait until the September 18 expiration.
There were still two days remaining.
For me, the more important question was whether keeping the position open for the remaining premium was worth maintaining the obligation on the shares.
I had sold something for $572 and could now eliminate that obligation for $54.
I chose to take the realized gain.
Two Covered Calls, Same 100 Shares
Now we can combine the two cycles.
Cycle #1
+$639
Cycle #2
+$518
Total:
$639 + $518 = $1,157
So in the first eight calendar days of owning ARM, my 100 shares generated:
$1,157 in realized covered-call income
That's approximately:
$11.57 per ARM share
This is the number that changes how I look at the position.
My ARM Economic Basis Has Fallen to $250.83
My original ARM purchase price was:
$262.40
I've now generated:
$11.57 per share
in realized covered-call income.
So for my own portfolio tracking, I calculate:
$262.40 − $11.57 = $250.83
That gives me what I call an:
$250.83 economic basis
This does not mean my broker necessarily changes the tax basis of my ARM shares to $250.83.
Tax treatment and brokerage cost basis are separate accounting issues.
I'm using economic basis as a personal performance metric.
It answers a simple question:
How much of my original share cost remains after accounting for the net option income I've actually realized from those shares?
Originally I had $26,240 invested.
I've recovered $1,157 through covered-call profits.
Therefore:
$26,240 − $1,157 = $25,083
Dividing that by 100 shares:
$250.83 per share
That's the number I want to continue tracking as this campaign develops.
I Recovered 4.4% of My Initial Investment in Eight Days
There is another way to look at the result.
My original stock investment was:
$26,240
My realized covered-call income is:
$1,157
Therefore:
$1,157 ÷ $26,240 = 4.41%
In eight calendar days, my two completed covered-call cycles generated cash equal to approximately:
4.4% of my original ARM share investment
That's a substantial amount for such a short period.
But this is also where I need to be careful about interpreting the number.
It would be misleading to annualize 4.4% over eight days and assume I can continuously reproduce that return.
I can't assume ARM will always offer the same volatility.
I can't assume the stock will always move favorably after I sell a call.
And I certainly can't assume every covered call will be profitable.
These first two cycles worked.
The next one may behave very differently.
Why I Didn't Wait for the Second Call to Expire
The second covered call is a good example of how I'm developing my options strategy.
I sold the contract for:
$5.72
I eventually bought it back for:
$0.54
That means I captured:
$5.18 of the original $5.72
or approximately:
90.6% of the original premium
Only about 9.4% remained.
I could have kept the position open for two more days and attempted to capture the final $54.
But that wasn't free money.
To pursue that last $54, I would have continued carrying the short-call obligation on $26,000+ worth of ARM shares.
Put differently, I had already captured more than 90% of the original premium.
I didn't feel compelled to risk the flexibility of the underlying position for the remaining 9%.
So I closed it.
Closing the Call Gave Me Something Besides $518
This is one of the most overlooked aspects of covered-call trading.
Buying back the option didn't simply realize my $518.
It also gave me back:
100 uncovered ARM shares
After closing the September 18 $265 call, there is currently no short call against those shares based on my logged trades.
That gives me choices.
I can sell another covered call.
I can wait for ARM to move higher before selling one.
I can wait for implied volatility to provide a more attractive premium.
I can choose a higher strike if protecting upside becomes more important.
Or I can simply do nothing.
I don't believe a covered-call strategy requires having a call open 100% of the time.
Sometimes flexibility itself has value.
Why I Used the $265 Strike
There is another interesting detail about both cycles.
My purchase price was:
$262.40
The covered-call strike was:
$265
So the strike was approximately $2.60 above my purchase price.
Had assignment occurred under the straightforward scenario, I wasn't writing a call below my original purchase price merely to chase premium.
That's important to my framework.
High option premiums can be tempting.
A lower strike will often offer more premium, but that additional income comes with a trade-off: I'm giving away more potential upside and increasing the chance that my shares are called away.
Premium by itself isn't enough.
The strike matters.
The Risk That Doesn't Show Up in the $1,157 Number
There is an obvious danger in telling this story only through option income.
I could say:
"I made $1,157 in eight days!"
That's true regarding the realized covered-call trades.
But it doesn't tell you whether my entire ARM investment is profitable.
I still own 100 ARM shares.
Their market value moves every trading day.
If ARM falls $20, my shares lose approximately:
$20 × 100 = $2,000
in market value.
That would be larger than the entire $1,157 of covered-call income I've generated so far.
This is why I never want to confuse:
Option income
with
Total position return
They are related, but they are not the same number.
Covered Calls Reduce My Economic Basis—They Don't Eliminate Risk
My $250.83 economic basis provides a cushion.
Compared with my original $262.40 purchase:
$262.40 − $250.83 = $11.57
I effectively have $11.57 per share of accumulated realized option income supporting the position.
But that isn't insurance.
If ARM experiences a major decline, the stock loss can exceed that cushion.
The covered calls helped.
They did not make the shares risk-free.
This is one of the most important principles I'm learning from running covered-call strategies across my portfolio:
Premium should complement the underlying investment thesis, not replace it.
I don't want to own a stock solely because its options pay attractive premiums.
If I wouldn't be comfortable owning the shares without the call premium, I need to question why I own them in the first place.
There's Also a Risk on the Other Side
A falling stock isn't the only risk.
Covered calls also create upside opportunity risk.
Imagine ARM suddenly makes a major move higher while I have a $265 call outstanding.
My shares may appreciate dramatically, but I've already agreed to sell them at $265 if the option is exercised.
I could potentially roll the call.
I could buy it back.
Or I could accept assignment.
But none of those choices changes the basic fact that selling the covered call means exchanging some potential upside for immediate premium.
That's the deal.
There is no free $572.
Someone paid me $572 because I gave them something valuable in return.
Understanding that trade-off keeps me from treating covered-call premium like a dividend.
It isn't.
My ARM Campaign After Eight Days
Here is where the position stands based on my completed trades:
| ARM Campaign | Result |
|---|
| Shares owned | 100 |
| Purchase date | Sep. 8, 2026 |
| Purchase price | $262.40 |
| Original investment | $26,240 |
| Covered-call cycle #1 | +$639 |
| Covered-call cycle #2 | +$518 |
| Total realized CC income | +$1,157 |
| Premium per share | +$11.57 |
| Premium vs. original investment | 4.41% |
| Original basis | $262.40 |
| Economic basis after premium | $250.83 |
| Completed CC cycles | 2 |
| Current short call | None |
| Shares currently uncovered | 100 |
What Happens Next?
The most tempting thing after closing a profitable covered call is to immediately sell another one.
That's not automatically my plan.
I've already completed two profitable cycles in eight days.
The shares have done their job.
The options have done their job.
Now I can wait for the next setup.
If ARM rallies, a higher stock price could allow me to consider a higher strike while still receiving attractive premium.
If implied volatility increases, the option market may pay more for the same strike.
If ARM falls, I may decide that selling another call near the current price would cap too much potential recovery.
The next trade has to stand on its own.
The fact that the previous two calls were profitable doesn't make the third one automatically attractive.
What This ARM Trade Is Teaching Me About the Wheel
People often describe the wheel strategy as a mechanical process:
Sell put → get assigned → sell call → get called away → sell another put.
My experience is making me view it differently.
I don't think every stage needs to happen immediately.
The real advantage is having multiple choices.
When I own 100 shares, I can sell a call.
When that call loses most of its value, I can close it.
When the shares are uncovered, I can wait.
If the shares eventually get called away, I can evaluate whether selling a put makes sense for re-entry.
The process doesn't need to operate like a machine.
For me, it is becoming more of a framework for managing capital, generating income, and making deliberate decisions around a stock I already own.
The Number I'm Watching: $250.83
The headline number from the first eight days is certainly:
$1,157 realized
But the number I care about going forward is:
$250.83
That's my current economic basis.
If I eventually complete another profitable covered-call cycle, I'll subtract that realized net premium from the economic basis again.
For example, another $500 of net premium would represent another:
$500 ÷ 100 = $5 per share
That would theoretically move my economic basis from:
$250.83 → $245.83
Again, that doesn't guarantee profitability.
It simply means I've recovered another portion of my original investment through realized option income.
Over a long enough campaign, that's exactly what I want to measure.
Final Thoughts
My ARM campaign is only eight days old, so it would be premature to declare the strategy a long-term success.
But the beginning has been productive.
I invested approximately:
$26,240
I still own:
100 ARM shares
I've completed:
2 profitable covered-call cycles
Those calls have generated:
$1,157 in realized income
That's approximately:
4.41% of my original investment
And my economic basis has moved from:
$262.40 to $250.83
Most importantly, both calls are now closed.
My 100 shares are uncovered, and I don't have to force another trade.
That's the part of the strategy I'm trying to improve: collect premium when the opportunity makes sense, take profits when most of the premium has been captured, and don't confuse constant activity with good trading.
The first ARM call generated $639.
The second generated another $518.
Now the shares are free again.
Cycle #3 can wait until the opportunity is worth taking.
Disclosure
This article is a personal trading journal documenting my own transactions and how I evaluate them. It is intended for educational and informational purposes only and is not individualized investment, financial, tax, or legal advice. Options involve significant risks, including assignment, loss of upside participation, and losses in the underlying security. The economic-basis calculation used here is my own portfolio-tracking method and should not be confused with brokerage or tax cost basis. Past performance, including these two profitable covered-call cycles, does not guarantee similar results in future trades.
